QAV 733 — Recovering

QAV Club 733

[00:00:00] Cameron: Wel­come back to QAV. Sev­en, three. Three, um, 7, 3 3. Is that right?

[00:00:16] Tony: Uh, let me have a look.

[00:00:19] Cameron: That’s

[00:00:19] Tony: Yes, it is. Yeah, no, it is.

[00:00:22] Cameron: El Elio said 372. When, when you were on the Wikipedia webi­nar today, and I thought that sound­ed like a lot. 7, 3 3.

[00:00:29] Tony: Yeah, and I could­n’t, I could­n’t cor­rect him because I’ve got, no, I’ve got no idea, but it’s been going for five years and there’s been, say, what’s that, 250 maybe?

[00:00:42] Cameron: maybe, but we restart­ed. Yeah, we restart­ed the num­ber­ing, I think dur­ing Covid, some­thing like that. Any who? Wel­come to QAV. Tony, you just did the Stock­o­pe­dia webi­nar about an hour ago,

[00:00:53] Tony: No, it did. Yep.

[00:00:55] Cameron: we will put out as a show at some stage, maybe next week. Uh, you did a great job. Well done. Smooth like but­ter. Smooth like but­ter. It’s like you’ve done this once or twice before.

[00:01:06] Tony: I have. Yes. Well, thank you. That’s, that’s nice,

[00:01:11] Cameron: Um,

[00:01:12] Tony: did­n’t real­ize I was doing it by myself until I texted you this morn­ing, say­ing, you

[00:01:17] Cameron: Well, it was­n’t by your­self. It was Elio inter­view­ing

[00:01:20] Tony: Elio was there. True. Yeah,

[00:01:22] Cameron: did a good job. Very smooth,

[00:01:23] Tony: he did. Yes.

[00:01:26] Cameron: Uh, uh, um, do you have any take­aways from that? You want to, while I cough? Still got my

[00:01:32] Tony: Uh, not real­ly. I think, um, I think I did a fair bit of work on Stock­o­pe­dia, um, you know, cause of the US show and because of going on their show. And there’s a rea­son­able over­lap between their high­ly ranked stocks and our buy lists. So, um, that’s prob­a­bly my take out from it all. Again, it’s a dif­fer­ent way of approach­ing things and get­ting to a sim­i­lar sort of result, I guess.

[00:01:59] Cameron: I’ve done a lot more work on Stock­o­pe­dia over the last week based on our recent con­ver­sa­tions, which we’ll get to lat­er on in the show. Uh, we do have Con­rad com­ing on the show, uh, short­ly in five min­utes. So this

[00:02:14] Tony: Mm hmm.

[00:02:15] Cameron: a pre­am­ble before he comes on. Uh, peo­ple may recall a few weeks ago, he sent us an email, which I read out on the show, talk­ing about the, um, Per­for­mance that he’d got in the recent, uh, finan­cial year, which I think was over 31%.

[00:02:33] Cameron: So we invit­ed him to come on and, um, give us a lit­tle bit more back­ground on that, which he has done, which is nice of him. So I’ll be cut­ting to him in a few min­utes.

[00:02:45] Tony: Yeah, good.

[00:02:48] Cameron: Uh, mean­while,

[00:02:50] Tony: Stock Doc­tor, the, um, sor­ry, the QAV Hive Mind at Work.

[00:02:54] Cameron: yes. Uh, mean­while, the mar­ket recov­ered from its con­nip­tion, Tony. Who,

[00:03:04] Tony: Yeah, well, it was a buy to dip sit­u­a­tion, I guess. Who would have thought?

[00:03:08] Cameron: who could’ve guessed that it would go, you know what, that huge pan­ic that we had, real­ly, there’s no rea­son for it, let’s get on with busi­ness.

[00:03:18] Tony: Yeah, I want to talk about that as we get through the show, maybe after the inter­view with Con­rad, but, um, there’s been some inter­est­ing results announce­ments this week in com­pa­ny report­ing sea­son, where, you know, in the case of one stock, the prof­it dou­bled and the share price went down. In the case of anoth­er stock, the prof­it went down and the share price went up.

[00:03:39] Tony: So, there’s a lot of, uh, A lot of inter­est­ing analy­sis going

[00:03:45] Cameron: last one I assume, I

[00:03:46] Tony: Yeah. Yeah.

[00:03:47] Cameron: some­thing in the ABC about, or The Fin this morn­ing about that,

[00:03:51] Tony: Hmm.

[00:03:51] Cameron: share price jump by like 8%,

[00:03:54] Tony: Yeah. And the, and the, um, prof­it went down.

[00:03:58] Cameron: it was bet­ter than expect­ed was the head­line I read.

[00:04:01] Tony: Yeah. I’ve got a, I’ve got a quote from O’Shaughnessy about that, if you want­ed to do that now while we wait for Con­rad.

[00:04:07] Cameron: Yeah, let’s get into that.

[00:04:09] Tony: Yeah. So this is about fore­cast­ing, which is, I think what’s dri­ving the share mar­ket up and down at the moment. Uh, so this is from What Works on Wall Street.

[00:04:19] Tony: Ter­rif­ic book. And the quote goes, accord­ing to Bar­ton Big­gs book, Wealth, War, and Wis­dom, there is ample evi­dence that so called experts mak­ing intu­itive fore­casts are right less than half the time, and that they were worse than dart throw­ing mon­keys in fore­cast­ing out­comes when mul­ti­ple prob­a­bil­i­ties were involved.

[00:04:42] Tony: And the study he was refer­ring to did not use a small sam­ple. It cov­ered 284 experts who made 82, 361 fore­casts over a peri­od of many years. The book con­clud­ed that most of these errors were made because ana­lysts made deci­sions using intu­itive emo­tion­al heuris­tics. And Big­gs is not alone. In anoth­er book, Val­ue Invest­ing Tools and Tech­niques for Intel­li­gent Invest­ment, James Mon­tier writes, One of the recur­ring themes of my research is that we just can’t fore­cast.

[00:05:15] Tony: There isn’t a shred of evi­dence to sug­gest that we can. This, of course, does­n’t stop every­one from try­ing. Last year, Rui Antunes of our Quant team looked at the short term fore­cast­ing abil­i­ty of ana­lysts. The results aren’t kind to my brethren. The aver­age 24 month fore­cast error is around 94%, and the aver­age 12 month fore­cast error is around 45%.

[00:05:39] Cameron: Wow.

[00:05:42] Tony: So there’s some research that backs up my ting, my bang, my drum about fore­cast­ing being use­less. Lots of research to back it up and that’s why stocks like JB HiFi go up when their prof­it goes down because the ana­lysts thought it would go down more. They wrong­ly fore­cast it would go down more.

[00:06:03] Cameron: Yeah. Speak­ing of books, um, long term, long time lis­ten­ers may recall, we had David Wal­dron, an Amer­i­can investor on who, uh, wrote a book some years ago. Um, what was the name of his book? Uh, it was, uh, some­thing, some­thing is good for some­thing. I think that was

[00:06:27] Tony: It was a val­ue invest­ing book. I’ll just look it up.

[00:06:29] Cameron: Yeah. He’s got anoth­er book. That is, that he’s work­ing on called Qual­i­ty Val­ue Invest­ing, Qual­i­ty Val­ue, How to Pick the Win­ning Stocks of Endur­ing Enter­pris­es. And, uh, he’s, he’s sort of live writ­ing it on Sub­stack. Chap­ter 1, um, I’m going to read a lit­tle quote from Chap­ter 1. Like air­line pilots dur­ing take­off and land­ing, qual­i­ty dri­ven val­ue investors adopt check­lists To ensure they con­duct the due dili­gence for the long term safe­ty and des­ti­na­tion suc­cess of their invest­ment port­fo­lios.

[00:07:05] Cameron: Chap­ter one intro­duces the check­list approach to stock pick­ing. It empha­sizes employ­ing a rig­or­ous yet straight­for­ward method­ol­o­gy when research­ing and ana­lyz­ing a com­pa­ny’s busi­ness mod­el for cur­rent wealth and its share price for present val­ue. Check­list dri­ven invest­ment research has con­tributed to our fam­i­ly’s busi­ness port­fo­lios mar­ket beat­ing per­for­mance.

[00:07:24] Cameron: For exam­ple, as of the writ­ing of this chap­ter, the QVI real time stock picks has achieved alpha on an aver­age per hold­ing equal weight­ed basis ver­sus the S& P 500 index bench­mark since its incep­tion in 2009. Not sure what alpha means, but I’m sure it’s good.

[00:07:45] Tony: above mar­ket returns.

[00:07:47] Cameron: Okay. Please don’t just take my word for the pos­i­tive impact of using an check­list.

[00:07:51] Cameron: The invest­ing uni­verse is Jeff Flem­ing just tried to call me. Jeff, not while I’m, not while I’m record­ing. Sor­ry, Jeff. I for­got to put my devices on. Do not dis­turb

[00:08:04] Cameron: when we start­ed this. What an ama­teur moment.

[00:08:06] Cameron: Um, I

[00:08:08] Tony: pod­cast­ing for,

[00:08:09] Tony: Cam?

[00:08:10] Cameron: don’t know. I just start­ed, brand new. Um, Let me get back to, uh, uh, where was I? David Wal­dron.

[00:08:18] Cameron: Please don’t just take my word for the pos­i­tive impact of using an investor check­list.

[00:08:22] Cameron: The invest­ing uni­verse’s most rec­og­niz­able names employ a check­list approach to research­ing and ana­lyz­ing stocks des­tined to out­per­form their tar­get­ed mar­ket bench­marks. Super Investors, Bill Ack­man, War­ren Buf­fett, Ben­jamin Gra­ham, Tony Kynas­ton, Char­lie Munger, Mon­ish Pabrai and Guy Speer are among the house­hold names often cit­ed for adopt­ing a check­list approach to achiev­ing port­fo­lio alpha.

[00:08:55] Cameron: You’re above Char­lie Munger in that list and it’s not, well, it is alpha­bet­i­cal. It’s alpha­bet­i­cal, but that aside, you’re still above Char­lie

[00:09:04] Cameron: Munger in that list

[00:09:06] Tony: Thank you, David. That’s, that’s, uh,

[00:09:09] Tony: that’s, yeah, a lethal com­pa­ny. I don’t feel like I should be with that list of names.

[00:09:15] Cameron: Wow, I think you should, Tony. And house­hold names.

[00:09:20] Cameron: I told you I’d make you

[00:09:21] Cameron: famous, now you’re a house­hold name, accord­ing to

[00:09:24] Cameron: David Wal­dron.

[00:09:25] Tony: House­hold name at least in two

[00:09:26] Tony: hous­es.

[00:09:29] Cameron: Well, here he

[00:09:31] Tony: book

[00:09:31] Tony: was called Build

[00:09:32] Tony: Wealth with Com­mon Stocks. Right.

[00:09:39] Cameron: to just turn around and

[00:09:41] Cameron: grab it off the shelf wher­ev­er it is, some­where up there, amongst all the Jesus and his­to­ry books. Uh, Con­rad!

[00:09:48] Con­rad: Hey, how you going?

[00:09:50] Cameron: Good! Wel­come to the show, Con­rad.

[00:09:54] Cameron: Kvyetos.

[00:09:55] Cameron: Is that how you pro­nounce the sur­name? Kvyetos.

[00:09:59] Cameron: They just intro­duced Tony on the Stock­o­pe­dia webi­nar as Kynas­ton, so today is the day of butcher­ing sur­names that start with K Y. Kvyetos! Wel­come to the show, Con­rad. Where are you, uh, where are you com­ing to us from?

[00:10:14] Con­rad: I’m in Mel­bourne. So it’s a nice sun­ny day down here, final­ly.

[00:10:20] Cameron: Noth­ing like Mel­bourne in win­ter. It’s my favourite, my favourite place to be, favourite time of the year. Actu­al­ly, spring’s even bet­ter, but win­ter’s pret­ty good.

[00:10:31] Cameron: Where do

[00:10:31] Con­rad: on

[00:10:31] Con­rad: lit­tle Blue­tooth, I’m not sure how good

[00:10:33] Con­rad: my micro­phone is.

[00:10:35] Cameron: you sound great! You sound like a pro­fes­sion­al who does this all the time. What part of Mel­bourne, Con­rad?

[00:10:42] Con­rad: I live in Reser­voir, so north.

[00:10:44] Cameron: Oh, Reser­voir,

[00:10:46] Cameron: Very nice. Come a long way in the last 25 years.

[00:10:49] Con­rad: It’s, it’s, it’s bet­ter. Still inter­est­ing.

[00:10:52] Con­rad: But,

[00:10:55] Cameron: And tell us, tell us, before we get into your invest­ing, Conor, tell us a bit about your­self. What do you do for a crust?

[00:11:00] Con­rad: uh, back­ground is an engi­neer. So I stud­ied engi­neer­ing, actu­al­ly stud­ied engi­neer­ing and finance, but went into engi­neer­ing. And I only worked as an engi­neer for about, it was about six or sev­en years before I got into con­struc­tion side. So I work in the

[00:11:14] Con­rad: man­ag­ing. Project man­ag­er side now,

[00:11:18] Cameron: Res­i­den­tial, com­mer­cial, indus­tri­al,

[00:11:22] Con­rad: So we’re sort of mid, mid range, about sort of 10 to 14 sto­ries.

[00:11:27] Cameron: right, so like one of Tony’s hol­i­day hous­es, some­thing like that.

[00:11:36] Tony: Watch­ing the Olympics though in Paris, would­n’t it be great if our cities all had a height lim­it of

[00:11:40] Tony: like 10 and it was just urban, dense liv­ing but it does­n’t look over­crowd­ed,

[00:11:48] Tony: it’s just such a

[00:11:48] Tony: nice lay­out, yeah.

[00:11:50] Cameron: All the eas­i­er, you can, every­one can see Ray Gun­n’s break­danc­ing per­for­mance from any,

[00:11:55] Cameron: any win­dow in Paris. That was about the only thing I paid atten­tion to in the whole Olympics was that, I thought it was great. I love it. Huge Ray Gunn fan. Good hon­our. don’t know what was going on but I just love it, I love it.

[00:12:10] Cameron: Um, alright Con­rad, well, uh, what else, what else can you tell us about your­self? Uh, how old?

[00:12:17] Con­rad: 39 and

[00:12:21] Con­rad: live with my part­ner. Yeah. We’re no

[00:12:23] Cameron: Yeah?

[00:12:23] Con­rad: No.

[00:12:24] Cameron: No.

[00:12:24] Cameron: kids, pets,

[00:12:26] Con­rad: Yeah. Got two dogs and babysit­ting anoth­er two. So four here at the moment.

[00:12:31] Cameron: babysit­ting two dogs,

[00:12:33] Con­rad: Yeah.

[00:12:35] Cameron: Who did you kill to have to get that sen­tence? Well,

[00:12:38] Con­rad: Uh, they’re Mel’s mom. So moth­er in law’s

[00:12:40] Cameron: Oh, okay.

[00:12:41] Con­rad: look­ing after for her.

[00:12:44] Cameron: Good stuff. So you sent us an email a cou­ple of weeks ago telling us that you’d had some good results for the finan­cial year. You want to walk us through what you did and what you got and Tony can then sort of start to ask ques­tions and pick your brains.

[00:13:02] Con­rad: Yeah. So I’ve been fol­low­ing, picked up QAV prob­a­bly about four years ago now. Um, so it’s been a lit­tle while. So I was doing it exact­ly as the QAV sys­tem for about two years. but always myself. So I always did every­thing from scratch myself, which is hence why I was say­ing in my email, I missed a lot of my three point sales.

[00:13:25] Con­rad: Um, so I just did it myself because I enjoyed it. So I was con­stant­ly run­ning the buy list, run­ning the check­lists. Worked using the Bret­ta­la­tor, doing it all myself as often as I could. Um, but yeah, just kept miss­ing sells and I feel like I’ve been invest­ing like as recre­ation­al­ly, I guess, for since I was 19.

[00:13:46] Con­rad: Any­time I have to actu­al­ly make a deci­sion, it turns out to be the wrong deci­sion. So that’s what, for the part of QAV that real­ly appealed to me. And every time I was out­side of the rules, like I’d miss a three point sell, I’d think, oh, maybe I’ll wait. It’s so close to the line. It might come back and then it would drop.

[00:14:05] Con­rad: Or if it was real­ly close to the line and I’d sell, then it would come back. Um, so I did, uh, the episode last week, you had a quote from an engi­neer, which is actu­al­ly basi­cal­ly exact­ly what I did. I thought, all right, the parts that are giv­ing me grief, I’m just going to remove because I can always add them back.

[00:14:21] Con­rad: I know exact­ly, I’ve got the Bible and spread­sheets. I know how to add them back. So I stripped it to some­thing that would take me prob­a­bly only a few min­utes a night to check. that seems to work real­ly well, but the, Prob­a­bly the real­ly big change was I actu­al­ly fil­ter by SD recov­ery. So that’s, that’s a real­ly big change because I’m basi­cal­ly exclud­ing com­pa­nies for doing well over a peri­od of time.

[00:14:47] Con­rad: So I test­ed that for about a year and it did well in the first year. So I think that I got high thir­ties on the dum­my port­fo­lio and then I start­ed with my actu­al port­fo­lio and got very sim­i­lar. So I think a low thir­ties. For the first year, um, and then I delet­ed the W port­fo­lio. So I’m not real­ly sure how well it’ll go. I think, I think this sys­tem gets an ini­tial bump because the SD recov­er­ing seems to, if you get in at the right time, seems to cor­re­late pret­ty high­ly with a stock move­ment, which I did test. So I went through and graphed all of the Stock Doc­tor finan­cial scores and prices the month they came out. And there’s some pret­ty good cor­re­la­tions, some right up around 0. 9, which is very high. But they’re not sure now how it’s going to go, now that I’ve got a

[00:15:41] Con­rad: port­fo­lio full of recov­ered stocks,

[00:15:43] Con­rad: effec­tive­ly.

[00:15:45] Tony: Yeah, right, I was going to ask that. So what’s your exit strat­e­gy from that? Because they’ll change from being recov­er­ing finan­cial health to being sat­is­fac­to­ry to

[00:15:54] Tony: strong poten­tial­ly.

[00:15:57] Con­rad: Yeah,

[00:15:58] Tony: And will you hold

[00:15:58] Tony: until it’s a three point trend line sell or will you sell when it changes

[00:16:02] Con­rad: basi­cal­ly mim­ic­ked but sim­pli­fied all the QAV rules. So, my rule 1 is 20%, just because I find that eas­i­er, a lit­tle bit less trad­ing. Um, and I’m will­ing to accept that extra risk, which is, it is actu­al­ly pret­ty sig­nif­i­cant. I think Tues­day real­ly high­light­ed that, because if I’ve got a stock that’s sit­ting at 19.

[00:16:20] Con­rad: 9, there’s noth­ing stop­ping that drop­ping 15 per­cent in a day. Um, so I’ve tak­en on that extra risk, which I, I accept, um, so my rule one is 20%, 20%, which is real­ly just for the amount of trad­ing, to sim­pli­fy the amount of trad­ing. Then when I was test­ing that, I found the 20 per­cent was a pret­ty good. Like I went back through the dum­my port­fo­lio, most of the ones I sold if I could have my time over, I would still have sold at that time.

[00:16:48] Con­rad: So what I did was I came up instead of the three point sell, I’m using a rolling month 20%. So that’s on the front page of Stock Doc­tor now, you can just, there’s a lit­tle drop down box, you can go to your stocks in your port­fo­lio and select month and it’ll give you the per­for­mance over the month. So when some­thing hits 20%, that’s my sell trig­ger that’s,

[00:17:12] Con­rad: I’ve sub­sti­tut­ed the 3 point sell.

[00:17:16] Tony: So you test that at month end or dur­ing

[00:17:18] Con­rad: so every night I open Stock Doc­tor, I fil­ter by my

[00:17:22] Con­rad: port­fo­lio and it quick­ly shows you the top 5

[00:17:24] Con­rad: up and down. So then if some­thing is 20%, the next day, if it’s a red day, I’ll sell it. If it’s a green day, I’ll

[00:17:33] Con­rad: go back the same night, the next night, and if it’s over 20,

[00:17:36] Con­rad: same process again.

[00:17:37] Tony: So 20 per­cent less than what? So

[00:17:40] Con­rad: 20 per­cent of rolling month.

[00:17:43] Tony: if it’s down 20 per­cent over the last 30 days, you’re

[00:17:45] Con­rad: Yep, I’ll sell

[00:17:47] Tony: Okay. Just one stock or any stock that’s

[00:17:50] Con­rad: any stock at

[00:17:51] Tony: Okay.

[00:17:53] Con­rad: So there’ll be a time where I’ll prob­a­bly clear my port­fo­lio. I’m sure there’ll be dur­ing a down­turn, there’ll be a time where I’ll have to clear half my stocks. With­in a day or two.

[00:18:05] Tony: And when you sell, do you re buy some­thing? You go back to do a down­load and look for the And so what oth­er fil­ters do you have in there when you rank to buy? Is it a stacked rank process or is it just the next one you find with a

[00:18:18] Con­rad: they were the QAV fil­ters, but I just changed them to be actu­al fil­ters. So instead of going through, I’ve just, for the moment, I’m not using Excel at all.

[00:18:27] Tony: Right.

[00:18:28] Con­rad: So like PE, I think I set the cut­off at 20, but most don’t make that any­way. The Josephine rule’s in there. So,

[00:18:34] Con­rad: uh, 1%, 1 per­cent over the last month I’ve got.

[00:18:39] Con­rad: Um, so I basi­cal­ly just put an upper lim­it or a low­er lim­it on every­thing that was in the QAV fil­ters. And it gets, I was tar­get­ing about five stocks, give or take two or three. And it seems to be pret­ty con­sis­tent. Report­ing sea­son, you’ll get a few more pop up and then sort of

[00:18:55] Con­rad: just before report­ing sea­son, it gets down to about one or

[00:18:57] Con­rad: two,

[00:18:59] Tony: Yeah, that’s the ques­tion I had. When I looked at the

[00:19:01] Tony: recov­er­ing stocks on our buy list, there was only five or

[00:19:05] Tony: six usu­al­ly in the list.

[00:19:09] Tony: So you’re

[00:19:09] Tony: find­ing that as well. You’re fil­ter­ing based on all the

[00:19:11] Tony: met­rics, but you’re hav­ing a no, a go, no go based on whether

[00:19:16] Tony: the finan­cial health is recov­er­ing.

[00:19:18] Con­rad: yet, cor­rect? Basi­cal­ly. Yeah. And five is what I was

[00:19:20] Con­rad: tar­get­ing.

[00:19:21] Tony: Yeah. okay. And then you just buy the, if there’s five in the buy list, you take the high­est QAV score or is there some

[00:19:28] Con­rad: moment, what I’ll do is I, any­thing that

[00:19:30] Con­rad: has the three, uh, three report­ing peri­ods annu­al­ized

[00:19:34] Con­rad: of increas­ing equi­ty goes to the top.

[00:19:38] Tony: Mm hmm.

[00:19:38] Con­rad: So say there’s five, if three of them have three con­sis­tent increas­es in equi­ty, they go to the top three. Then I sort by, this is some­thing I’ve changed, I guess, I sort by the copy curve.

[00:19:48] Con­rad: So whichev­er is clos­est to pos­i­tive cross­ing zero out of

[00:19:54] Con­rad: what’s left

[00:19:56] Con­rad: is what goes to the top of the list.

[00:19:58] Tony: so just bet­ter explain what the COPIC curve is in case peo­ple don’t

[00:20:01] Con­rad: the, I think it

[00:20:02] Con­rad: looks at the 14 month

[00:20:05] Con­rad: sort of human recov­ery peri­od from trau­ma.

[00:20:09] Tony: From grief. Yeah.

[00:20:10] Con­rad: yeah, great. And

[00:20:11] Con­rad: the rea­son I use that one was because Once I fil­ter by Stock Doc­tor recov­er­ing, I sort of use that as the theme

[00:20:17] Con­rad: to influ­ence the rest. So, if they’re recov­er­ing, the mon­ey is going to the bot­tom

[00:20:21] Con­rad: line,

[00:20:22] Tony: Mm hmm.

[00:20:23] Con­rad: which would come through as the three increas­es in equi­ty. And then, the rea­son I’m copy­ing, because I fig­ured some­thing has hap­pened at some point for this stock to have, you know, A

[00:20:32] Con­rad: PE of half the mar­ket or cash flow of half the mar­ket.

[00:20:37] Tony: Mm hmm.

[00:20:38] Con­rad: to fig­ure out what, because I’m not putting that time in. So by using the top­ic, my, in the­o­ry, let oth­er peo­ple do the research.

[00:20:48] Con­rad: They see, oh, there was an inci­dent change of CEO, change of mar­ket con­di­tions, change of com­pe­ti­tion. Some things hap­pen for the mar­ket to price this low­er than the mean. And I’m wait­ing for that curve to give me an indi­ca­tion that the

[00:21:01] Con­rad: mar­ket’s prob­a­bly ready to

[00:21:04] Con­rad: To revert to the main.

[00:21:06] Tony: And the copy curve is a mov­ing

[00:21:07] Tony: aver­age

[00:21:08] Con­rad: Yeah.

[00:21:09] Tony: cumu­la­tive short term trend over long term

[00:21:12] Tony: trend type

[00:21:13] Tony: curve, isn’t it? Yeah.

[00:21:15] Con­rad: that’s only

[00:21:16] Con­rad: to sort. So they’ll only look at

[00:21:18] Con­rad: the copy

[00:21:18] Con­rad: curve for two or three stocks.

[00:21:20] Tony: Mm hmm.

[00:21:21] Con­rad: So that’s the sys­tem for the

[00:21:22] Con­rad: moment. Um, but as I said to, in my email to

[00:21:27] Con­rad: Cam, I expect that it’s not gonna. Reach QAV long term because q v’s been through mar­ket cycles. This has­n’t,

[00:21:36] Con­rad: so this is the way I look at it. It’s a com­pro­mise

[00:21:39] Con­rad: for time.

[00:21:40] Tony: Right. But, but it’s putting empha­sis on the finan­cial health recov­er­ing, con­tin­u­ous­ly increas­ing equi­ty. I guess the copy curve, that’s Momen­tum, I sup­pose. Any­thing else that

[00:21:55] Con­rad: bring it up.

[00:21:56] Tony: I think you said in the email you had, um,

[00:21:59] Tony: you’re look­ing at

[00:21:59] Tony: Prop­Caf less

[00:22:01] Tony: than 8, but greater

[00:22:03] Tony: than 2. 5.

[00:22:05] Con­rad: Oh yeah, cor­rect. So less than eight is, I was strug­gling to get the five at sev­en.

[00:22:10] Con­rad: Um, so I did put it in at eight, but gen­er­al­ly they do come

[00:22:14] Con­rad: in under sev­en. So there’s only been a, a hand­ful of times and I would, that, that,

[00:22:18] Con­rad: would go to the bot­tom of the list. If it’s over

[00:22:20] Con­rad: sev­en,

[00:22:21] Tony: Yeah, okay. So I know that there are stocks with finan­cial health recov­er­ing that have much high­er Prop­Cafs than 7, so you’re only inter­est­ed in those.

[00:22:30] Con­rad: no, they won’t come up. They won’t even appear.

[00:22:33] Tony: Okay.

[00:22:34] Con­rad: and yeah, so the oth­er thing was

[00:22:36] Con­rad: I did,

[00:22:36] Con­rad: I fil­tered out under 2. 5, which was

[00:22:39] Con­rad: just based

[00:22:40] Con­rad: on expe­ri­ence. I looked, so to get to the SD recov­er­ing, that was the theme amongst the win­ners for the two or three years I was doing QAV. And the prop cap of less than 2.

[00:22:49] Con­rad: 5 was the theme around my worst

[00:22:51] Con­rad: per­form­ing.

[00:22:53] Tony: Okay.

[00:22:53] Con­rad: rea­son I fil­ter them out is I fig­ure if they, if they’re at 2. 5, I might

[00:22:58] Con­rad: miss 20%. They’ll come on when, if

[00:23:01] Con­rad: they’re sit­ting at 2, and they come up to 2. 5, I miss that

[00:23:04] Con­rad: first 20%,

[00:23:06] Con­rad: if they’re going to go on a good run.

[00:23:08] Tony: Right. And you think that if they’re below 2. 5 there’s a prob­lem

[00:23:11] Con­rad: either it’s not

[00:23:12] Con­rad: a actu­al reflec­tion on val­ue, so it’s a

[00:23:14] Con­rad: finan­cial Insti­tu­tion of some sort where it’s not actu­al­ly

[00:23:18] Con­rad: mea­sur­ing what I want it to be mea­sur­ing. So I don’t check that either. So it’s

[00:23:22] Tony: Mm hmm.

[00:23:23] Con­rad: just cut­ting out that bit of time. Um, or the oth­er thing was, yeah, I fig­ure if it’s, if it’s a

[00:23:30] Con­rad: reg­u­lar trad­ing com­pa­ny and it’s less than 2.

[00:23:32] Con­rad: 5, there must be a rea­son that traders are, that’s,

[00:23:37] Con­rad: Giv­ing it that val­u­a­tion. And again, I just don’t

[00:23:39] Con­rad: put the time in to, to find that rea­son.

[00:23:44] Tony: Yeah. And I noticed in what you

[00:23:46] Tony: sent us that when you’re doing your down­loads or your fil­ters, you’re actu­al­ly get­ting a numer­i­cal mea­sure­ment for finan­cial health. So it’s a Stock Doc­tor finan­cial health score

[00:23:59] Tony: that puts it in the recov­ery range, I guess. But it seemed like that score was chang­ing month to month.

[00:24:05] Tony: Is it chang­ing more

[00:24:06] Con­rad: research. So I sent you, that was what I used to actu­al­ly

[00:24:09] Con­rad: come up with fil­ter­ing by SD recov­ery.

[00:24:13] Tony: Okay.

[00:24:14] Con­rad: So yeah, I went through and actu­al­ly that was, that’s some­thing I do sep­a­rate to, that’s not part of the QAV sys­tem. That was how I had the

[00:24:21] Con­rad: con­fi­dence to go with, okay, yeah, I can fil­ter by

[00:24:24] Con­rad: SD recov­ery.

[00:24:26] Tony: You know, I noticed in what you sent me, so for

[00:24:28] Tony: exam­ple, SXE was one of the com­pa­nies and what you sent through, you’ve got June 21, released August 21, SD

[00:24:37] Tony: Health 0. 26. And then, I see, so it’s the SD Health score every time that the

[00:24:44] Tony: new

[00:24:45] Tony: num­bers are released. Okay.

[00:24:47] Con­rad: And

[00:24:47] Con­rad: the price at the end of that

[00:24:48] Con­rad: month.

[00:24:49] Tony: Yeah, yeah, okay. And you just equate, so the Stock Doc­tor Health of 0.

[00:24:57] Tony: 26 puts it as a recov­er­ing stock in the in the down­loads

[00:25:00] Con­rad: I would have got onto all the stocks that are on here, but this is just

[00:25:02] Con­rad: the research I do on the side. So I have to go

[00:25:04] Con­rad: back

[00:25:04] Con­rad: and man­u­al­ly type these num­bers in. I don’t do this reg­u­lar­ly. I just did it before imple­ments. I did this a cou­ple of years ago before imple­ment­ing

[00:25:13] Con­rad: the sys­tem. And I’ve just been

[00:25:14] Con­rad: updat­ing it as I go along.

[00:25:16] Tony: Yeah, but what it’s show­ing is that there is a strong cor­re­la­tion

[00:25:19] Tony: between Stock Doc­tor Health as a score

[00:25:23] Con­rad: Yeah.

[00:25:24] Tony: And then, um, I

[00:25:26] Tony: guess is the, I mean, Stock Doc­tor Health num­ber­ing is an inverse,

[00:25:29] Tony: so a high num­ber is, you know, is

[00:25:34] Tony: good. So if you get a high num­ber,

[00:25:37] Tony: high neg­a­tive is

[00:25:38] Tony: good. Yeah. And if you get a end of month price, which is low, then that’s, that’s

[00:25:44] Tony: the best thing to do.

[00:25:46] Con­rad: Yeah, so

[00:25:47] Tony: you could

[00:25:47] Con­rad: actu­al­ly, which has 0.

[00:25:49] Con­rad: 86 which is a very very high cor­re­la­tion, is my

[00:25:51] Con­rad: best per­form­ing

[00:25:52] Con­rad: stock.

[00:25:53] Tony: yeah. So that’s inter­est­ing though. I guess where I’m get­ting to is there’s a math­e­mat­i­cal rela­tion­ship there,

[00:25:58] Tony: which could actu­al­ly be used to rank things

[00:26:01] Tony: and put more of,

[00:26:02] Tony: an invest­ment in

[00:26:04] Tony: a high­er scored

[00:26:06] Con­rad: sure though if you can get SD health out of, I think you can, but I don’t think you can get back­dat­ed, so you’d have to man­u­al­ly

[00:26:15] Con­rad: put in to get a trend.

[00:26:17] Tony: Okay. No, that’s inter­est­ing. That’s real­ly good. Is there any­thing else that you picked up on? So you picked up on recov­er­ing, you picked up on

[00:26:27] Tony: price to cash flow, you’ve got your COPIC curve, which is a mov­ing aver­age trend. Is there any­thing

[00:26:33] Con­rad: that’s the, the rules are, I do have, because of the SD recov­er­ing, increas­ing equi­ty,

[00:26:39] Con­rad: yeah, because the, the,

[00:26:42] Con­rad: The SDA recov­er­ing seems to give a good ini­tial bump. I do

[00:26:45] Con­rad: have a rule to trade out the low­est per­form­ing at the end of report­ing sea­son.

[00:26:50] Tony: So it’s

[00:26:50] Tony: a

[00:26:50] Tony: rebal­anc­ing

[00:26:51] Con­rad: Yeah, so it’s a

[00:26:53] Con­rad: sort of a drop­ping a com­pa­ny.

[00:26:55] Tony: Right.

[00:26:56] Con­rad: And

[00:26:57] Con­rad: what I do with that is if the bot­tom 1 or 2 has to

[00:27:00] Con­rad: be less than 10 per­cent in the, over the last 12 months.

[00:27:04] Con­rad: So if the stock has­n’t done more than 10 per­cent and the new fig­ures

[00:27:08] Con­rad: have to be in Stock Doc­tor and it’s not on my list.

[00:27:12] Tony: So just explain that to me again. So when you say

[00:27:15] Tony: 10%, you’re say­ing the price has­n’t increased by 10 per­cent and

[00:27:19] Tony: then it’s got to be on the

[00:27:20] Tony: bot­tom of your Stock

[00:27:22] Con­rad: be on my buy

[00:27:22] Con­rad: list.

[00:27:23] Tony: can’t be on your buy list. Okay. So that’s some­thing you’ve held

[00:27:28] Tony: a new num­bers are out and then you’ve checked it against per­for­mance over the 12 months and whether it’s on your, whether it’s still recov­er­ing,

[00:27:35] Tony: basi­cal­ly.

[00:27:36] Tony: Yeah. Okay.

[00:27:38] Con­rad: so that’s just to get

[00:27:39] Con­rad: in because if you get in soon enough, there does seem to be an ini­tial

[00:27:43] Con­rad: bump if you get into those recov­er­ing stocks.

[00:27:46] Con­rad: Um, so that’s just to keep one or two in the port­fo­lio as

[00:27:49] Con­rad: recov­er­ing,

[00:27:51] Tony: Yeah. Right. Okay. So have you done any sort of

[00:27:54] Tony: play­ing

[00:27:55] Tony: around with this? If you only had stocks that were recov­er­ing and as they got to a cer­tain finan­cial health, you cut them, would that per­form

[00:28:02] Tony: bet­ter

[00:28:02] Tony: than let­ting them go for 12 months?

[00:28:04] Con­rad: not yet because I’ve actu­al­ly got rules around test­ing new

[00:28:08] Con­rad: rules. So

[00:28:10] Con­rad: to test the new

[00:28:11] Con­rad: rule, I dupli­cate my port­fo­lio

[00:28:14] Tony: Yep.

[00:28:15] Con­rad: and I run that for a min­i­mum of two report­ing sea­sons.

[00:28:17] Tony: Yep. Okay.

[00:28:19] Con­rad: So at the moment, because

[00:28:20] Con­rad: I’ve got a cou­ple of slots that have done well, what I tried, and this was real­ly just for

[00:28:24] Con­rad: it, just to see how it would per­form, was I’m try­ing to see what would hap­pen if I sell when a com­pa­ny gets RSI over 85. So that’s when the RSI 14 indi­ca­tor, which is that sort of price elas­tic­i­ty indi­ca­tor, gets over 85. I’ve seen if that would be a high point sell. So I’m run­ning that in the back­ground on my dum­my port­fo­lio as my rule that I’m test­ing. But I found it’s not real­ly a good rule to actu­al­ly test because all you’re real­ly doing is pit­ting one or two com­pa­nies against each oth­er.

[00:28:57] Con­rad: So

[00:28:59] Con­rad: that one would need to be test­ed

[00:29:00] Con­rad: over quite a long peri­od of time.

[00:29:03] Tony: Yeah,

[00:29:03] Tony: I guess my expe­ri­ence with all those kinds of things is you pick one and stick with it. They’re all

[00:29:08] Tony: much of a much­ness. They all

[00:29:09] Tony: work to a cer­tain extent. And at dif­fer­ent times, one works bet­ter than the oth­er. But

[00:29:14] Tony: you’ve got to test

[00:29:14] Tony: them over a long

[00:29:15] Tony: peri­od of time.

[00:29:16] Con­rad: yeah. So I’ll keep run­ning that dum­my port­fo­lio, and then any oth­er rules I come up with along the way. Any­thing, these are all except for QAV rules, which I know we’ll get

[00:29:27] Con­rad: at and back.

[00:29:28] Tony: Yeah, okay.

[00:29:29] Con­rad: I’m not going to

[00:29:29] Con­rad: test QAV

[00:29:30] Con­rad: rules.

[00:29:31] Tony: So have you done any sort of like iso­la­tion test­ing? Because you’ve still got increas­ing con­sen­sus. Sor­ry, increas­ing share­hold­er equi­ty. Con­tin­u­ous­ly increas­ing share­hold­er equi­ty. You’ve got this price indi­ca­tor of whether it’s 10%. or more for the last 12 months. Um, there’s a few oth­er ones in there.

[00:29:53] Tony: Do you,

[00:29:54] Tony: you have, have you test­ed to see whether it’s bet­ter or worse if you drop one of those or just use one of those by itself?

[00:30:01] Con­rad: Not yet, no.

[00:30:04] Tony: So if you just sort of, if you just have recov­er­ing stocks and as they

[00:30:07] Tony: stop being recov­er­ing, you ditch them, you don’t know whether that’s the main

[00:30:09] Tony: dri­ver. Of all

[00:30:11] Tony: this.

[00:30:12] Con­rad: nah, I could test that, but I think that’s

[00:30:15] Con­rad: prob­a­bly stray­ing a bit too far from the QAV sys­tem. Like a full rebal­ance, just based on one met­ric.

[00:30:22] Tony: Yeah, Okay.

[00:30:23] Tony: Fair enough.

[00:30:24] Con­rad: Yeah, I could, I could test it. I could. But I think for the moment, like, the goal was to keep the real core QAV prin­ci­ples

[00:30:32] Con­rad: with just two or three min­utes of work dur­ing the week.

[00:30:36] Con­rad: So any­time I do get, I can work on sort of what new rule can be added or I can do that more in my own time than wor­ry­ing about hav­ing

[00:30:45] Con­rad: to check every night to not miss any sells or

[00:30:47] Con­rad: buys.

[00:30:48] Tony: Right. Now, I guess the rea­son for drilling down on it so hard is that, um, I think, I think you’re onto some­thing with recov­er­ing stocks. It’s some­thing that I’ve thought about too, but if we change the check­list to boost it, How much do we boost­ed by in the score?

[00:31:04] Tony: Yeah,

[00:31:05] Tony: so I’m try­ing to find out whether you think it’s a main dri­ver

[00:31:08] Tony: or it’s part of the

[00:31:08] Tony: mix and it’s a con­trib­u­tor, or it’s an over

[00:31:11] Tony: con­trib­u­tor,

[00:31:12] Tony: um,

[00:31:13] Con­rad: I think it would be a good for new mem­bers and lis­ten­ers. It would be a good entry into QAV when you’re buy­ing 15 to 20 stocks. you ini­tial­ly focus to fill the port­fo­lio on SD recov­er­ing, but then I think once the port­fo­lio is up and run­ning, um, yeah, it’s going to be hard to

[00:31:35] Con­rad: how it gets imple­ment­ed

[00:31:37] Con­rad: into the score.

[00:31:39] Tony: yeah, like, we can work on that, but I think also too in terms of set­ting up a new port­fo­lio of just SD recov­er­ing, um, a lot of the stocks that I have seen are very small, They’re in the

[00:31:51] Con­rad: Yeah. Cor­rect.

[00:31:52] Tony: So yeah,

[00:31:53] Tony: it’ll take you a long time if you’re build­ing a

[00:31:55] Tony: large port­fo­lio of 15 recov­er­ing stocks that also have

[00:32:00] Tony: low price

[00:32:01] Tony: to oper­at­ing cash flow.

[00:32:02] Con­rad: Yeah. So I think I’ve only had two that I could get into it. So I’ve also got my super port­fo­lio, but

[00:32:08] Con­rad: there’s just the turnover. I don’t know how I’m going to At the moment, that’s real­ly going on the QAV sys­tem, um, because the turnover is just not going to be enough. So I think two have come up recent­ly.

[00:32:19] Con­rad: I had sev­en West about a year ago came in, and Red Ener­gy came up. Um, they’ve both done okay. I think they’re both about 20 per­cent in the last year. Yeah, since I’ve held them,

[00:32:33] Con­rad: uh, but not, not a lot come up that are in the ASX 300.

[00:32:37] Tony: Yeah, right. Yeah. That’s, that’s my expe­ri­ence as well.

[00:32:40] Con­rad: Yeah.

[00:32:41] Tony: There’s cer­tain­ly some­thing to look for just, just on that. I mean, I, um, when I first start­ed think­ing about this, I start­ed up a dum­my port­fo­lio of my own. This is going back near­ly a year, 18th of Sep­tem­ber, 2023, um, and trad­ed using the QAV sys­tem, but Just bought stocks that had Stock Doc­tor recov­er­ing as their finan­cial health trend.

[00:33:04] Tony: And that’s up 16 per­cent ver­sus 7 per­cent for the mar­ket over the same peri­od. And also, I think the dum­my port­fo­lio over that peri­od was around 6%. So, it’s out­per­formed The gen­er­al QAV and out­per­form­ing the mar­ket. So I think there is some­thing to focus­ing on recov­ery. Um, I guess we just need to know how much to boost it in the QAV check­list or whether to make it a go or no go.

[00:33:31] Tony: I think if I made it a go or no go, like it

[00:33:33] Tony: has to be a finan­cial recov­er­ing stock, you don’t get a big enough buy list and you don’t get a big enough ADT range to be able to

[00:33:40] Tony: buy shares from.

[00:33:43] Con­rad: And that’s, that’s what I found. So the,

[00:33:45] Con­rad: the dum­my port­fo­lio I

[00:33:47] Con­rad: filled

[00:33:47] Con­rad: up real­ly quick­ly. It just hap­pened to be that report­ing sea­son. I’ve got right up to 15 straight away.

[00:33:53] Con­rad: I’m still only sit­ting at, I think, 12.

[00:33:56] Tony: Yep. Yep. Okay.

[00:34:02] Con­rad: so

[00:34:02] Tony: That’s great though.

[00:34:04] Tony: it’s excit­ing to have that kind of return.

[00:34:07] Con­rad: yeah it is yeah

[00:34:08] Tony: You know, in one year, and

[00:34:09] Tony: then with the dum­my

[00:34:09] Tony: port­fo­lio,

[00:34:10] Tony: it’s real­ly two years. So that’s great.

[00:34:12] Con­rad: yeah the dum­my port­fo­lio kept out­per­form­ing my port­fo­lio so I have to delete it um but yeah look and again I’d say to all lis­ten­ers and mem­bers it’s

[00:34:22] Con­rad: def­i­nite­ly not gonna be

[00:34:24] Con­rad: long term bet­ter than QAV

[00:34:26] Tony: Well, you don’t know.

[00:34:27] Con­rad: just a it’s a

[00:34:30] Con­rad: it’s quick­er dur­ing the week like dur­ing the trad­ing days it’s quick­er But, if my sys­tem goes through, QAV goes through 6 or 7 mar­ket cycles, I antic­i­pate it’s prob­a­bly going to

[00:34:42] Con­rad: come out look­ing like QAV.

[00:34:44] Tony: Yeah, right. Okay. Yeah, poten­tial­ly. But yeah, I think there’s some­thing in the recov­er­ings, finan­cial health trend, and I think we need to boost that in the check­list. But the ques­tion now is by how much? So I know you tried to run a regres­sion test for me this morn­ing, Cam. We could­n’t get it to work sat­is­fac­to­ri­ly,

[00:35:05] Tony: but we should try and do that and just see how.

[00:35:09] Tony: How much it out­per­forms and decide how much to boost the score and the check­list

[00:35:13] Tony: by.

[00:35:14] Cameron: Yeah, I mean, if I can get the regres­sion, uh, test work­ing again, I can poten­tial­ly try a num­ber of dif­fer­ent, uh, scores for recov­ery.

[00:35:28] Cameron: I’m going to go back over 20 years of data and just play it out some­how. Yeah.

[00:35:32] Cameron: Inter­est­ing.

[00:35:34] Tony: Hmm.

[00:35:35] Cameron: Good stuff, Con­rad. Well done. Thank you for shar­ing your, uh, find­ings with, uh, the com­mu­ni­ty where it’s good of you.

[00:35:42] Cameron: Appre­ci­ate

[00:35:42] Cameron: it.

[00:35:43] Con­rad: That’s alright, thanks

[00:35:44] Con­rad: a lot for hav­ing me on.

[00:35:46] Tony: No, it’s excel­lent. Nice to meet you. And, um, yeah,

[00:35:49] Tony: this is every­thing I hope QAV would be. Just

[00:35:50] Tony: peo­ple play­ing around with data and adding to the

[00:35:54] Tony: process. It’s

[00:35:54] Tony: great.

[00:35:56] Cameron: Feed­back

[00:35:56] Con­rad: Yeah, well, ide­al­ly I would have loved to just per­sist with the same sys­tem, but as I said, any time I’ve missed a trig­ger and I had to make an

[00:36:03] Con­rad: actu­al deci­sion, I just, I seem to have a gift for

[00:36:05] Con­rad: get­ting that wrong.

[00:36:07] Tony: You’re not alone.

[00:36:09] Con­rad: Yeah,

[00:36:11] Tony: Yeah, that’s

[00:36:11] Cameron: right. What do you got on for the, what do you got on for the rest of the day,

[00:36:14] Cameron: Con­rad?

[00:36:15] Con­rad: back to work.

[00:36:17] Cameron: Got,

[00:36:18] Cameron: got, got a quick after hours for us. Got tips on

[00:36:22] Cameron: some­thing good to watch, some­thing good to lis­ten to, some­thing good to read.

[00:36:26] Con­rad: Uh, well not real­ly, I was watch­ing the Olympics, so that was all I’ve been watch­ing over the last cou­ple of weeks. Um, nah, unfor­tu­nate­ly my

[00:36:36] Con­rad: read­ing is a bit bor­ing. I’m read­ing

[00:36:38] Con­rad: full by ran­dom­ness at the moment.

[00:36:40] Tony: Oh, that’s a great book.

[00:36:42] Con­rad: yeah, but that’s on the

[00:36:43] Con­rad: QAV list I think I’ve

[00:36:44] Con­rad: rec­om­mend­ed.

[00:36:46] Cameron: Yeah, good.

[00:36:47] Tony: good.

[00:36:48] Cameron: What about music? What do you

[00:36:49] Cameron: lis­ten to?

[00:36:50] Con­rad: I’m a heavy met­al fan.

[00:36:52] Cameron: Yeah, who in par­tic­u­lar? What are you

[00:36:54] Cameron: lis­ten­ing to today?

[00:36:56] Con­rad: At the moment I’ve been lis­ten­ing a lot to Goji­ra after they were, they per­formed in the open­ing cer­e­mo­ny. So they’ve been one of my favourite bands for

[00:37:02] Con­rad: years.

[00:37:04] Cameron: Godzil­la?

[00:37:05] Con­rad: Yeah,

[00:37:07] Cameron: Japan­ese Godzil­la? Goji­ra?

[00:37:09] Con­rad: Godzil­la but French band.

[00:37:11] Cameron: Right, I think I have lis­tened to them

[00:37:13] Cameron: before. I’ll have to check them out again. I was lis­ten­ing to old Aussie Osborne albums this morn­ing, so, I’m in a heavy met­al

[00:37:21] Cameron: mood. That’s good.

[00:37:23] Con­rad: and of course love my Metal­li­ca

[00:37:25] Con­rad: and Iron Maid­en.

[00:37:27] Cameron: Yeah. You know what I lis­tened to this morn­ing, which I had­n’t heard for a while, it’s not quite met­al, I don’t think, it was Def Lep­pard’s, uh, um, not Pyro­ma­nia, Hys­te­ria. Ever lis­ten to Def Lep­pard Hys­te­ria, their mutt lay­ing album that was like, ful­ly Fairlight synth back­ing vocals kind of thing? Had­n’t heard

[00:37:48] Con­rad: yeah, I have,

[00:37:49] Cameron: I enjoyed it. It’s good. Took me back to the

[00:37:52] Cameron: late 80s.

[00:37:55] Cameron: Which trust me, it was a good time

[00:37:56] Cameron: to lis­ten to heavy met­al music. Alright.

[00:38:00] Tony: All right. Well, thank you.

[00:38:01] Tony: Thanks for

[00:38:02] Con­rad: All right,

[00:38:02] Cameron: man. I

[00:38:02] Cameron: appre­ci­ate it.

[00:38:04] Con­rad: No wor­ries.

[00:38:04] Cameron: rest of your

[00:38:05] Con­rad: See ya.

[00:38:05] Cameron: Cheers.

[00:38:12] Cameron: Inter­est­ing.

[00:38:13] Tony: Yes, very. All right.

[00:38:15] Cameron: Recov­ery.

[00:38:19] Tony: Yeah, and that kind of makes sense to me intu­itive­ly as well. We’re try­ing to buy val­ue stocks. So they’re the ones that are recov­er­ing, I guess. They’ve had a been through a prob­lem, been through a cri­sis, and now they’re What I found as well is that they focus on their finan­cials because they’ve been under so much pres­sure and scruti­ny.

[00:38:35] Tony: They’re real­ly try­ing hard

[00:38:36] Tony: to

[00:38:36] Tony: reduce costs and pay down debt, um, fix up what­ev­er’s been bro­ken with

[00:38:41] Tony: their

[00:38:41] Tony: com­pa­ny. Um, yeah,

[00:38:44] Tony: so it makes sense. Oh,

[00:38:47] Cameron: know, I was kind of think­ing of our 3PTL

[00:38:50] Cameron: sen­ti­ment chart­ing, you know, we’re often find­ing com­pa­nies that, uh, have bot­tomed out, have been a falling knife for a long time, and then they’re just turn­ing around, and we’re often, you know, You know, I’m, I’m, it’s a dou­ble edged sword get­ting them when they just turn around because usu­al­ly they’re just above their buy line but they’re also just above their sell line often and it can, it can go either way but, um, you know, they, they seem to be in a recov­er­ing phase.

[00:39:16] Cameron: I haven’t done any cor­re­la­tion between Stock Doc­tor’s recov­ery finan­cial health rat­ing and where they look, you know, what they look like on a chart

[00:39:27] Cameron: but I would assume there’d be some cor­re­la­tion

[00:39:29] Cameron: there.

[00:39:30] Tony: Yeah. And we, we also give two points in the check­list for stocks, which are a recent upturn. So it’s a kind of sim­i­lar thing too.

[00:39:38] Cameron: Yes.

[00:39:39] Tony: point. And just to give peo­ple a flavour for what’s a recov­er­ing stock. I went

[00:39:43] Tony: through the buy list this morn­ing and had a look. There’s some small ones like Viva Leisure, McPher­son­’s, uh, City Logis­tics, but A& P’s on there now as a, as a recov­er­ing stock.

[00:39:56] Tony: So that’s a rea­son­able size. Uh, IGL, which is IVE Group. Oh no, sor­ry, that’s not recov­er­ing. Oh yes, they are recov­er­ing. Uh, Schae­fer Cor­po­ra­tion is very small. Um, AGL is down as a recov­er­ing. So we do get some big ones occa­sion­al­ly, but it’s prob­a­bly only about, I think there’s, what, 1,

[00:40:18] Tony: on the buy

[00:40:18] Tony: list at the moment.

[00:40:19] Tony: So it’s not, it’s not a big list.

[00:40:21] Tony: Mm

[00:40:24] Cameron: speak­ing of cor­re­la­tion and lists, Tony, I, this week­end, I did my Stock Doc­tor ver­sion of the buy list. I also did a Stock­o­pe­dia ver­sion of the Aus­tralian buy list, so I could com­pare them side by side.

[00:40:42] Cameron: And, uh, there was A fair amount of crossover. There were some things that I dis­cov­ered, um, where the, the, a large num­ber of the stocks that were on my Stock­o­pe­dia list that weren’t on my Stock Doc­tor list were because one of the pri­ma­ry fil­ters I have set up in Stock Doc­tor is a three month aver­age trad­ing vol­ume of greater than zero.

[00:41:08] Cameron: And when I went down and drilled into a lot of the stocks that, um, were on Stock Doc­tor and not on Stock­o­pe­dia was because they had like near­ly no trad­ing vol­ume, um, and we don’t fil­ter that out at a pri­ma­ry lev­el when we do the Stock Doc­tor list. We, we fil­ter out aver­age, aver­age dai­ly trade, At the point of trad­ing, usu­al­ly we don’t take them out.

[00:41:33] Cameron: So that was the major­i­ty of the dif­fer­ence. And then there was a few stocks, weird­ly, that just did­n’t appear in the down­load, uh, from Stock­o­pe­dia. So I’ve been talk­ing to Elio try­ing to debug that. But what I did after that was I threw a bunch of the data into PT and asked it to see if it could find any cor­re­la­tion between finan­cial health rat­ing and finan­cial health trend and star stock scores in stock Doc­tor, and some of the things that I’m track­ing in Stock­o­pe­dia, the Alt­man Z two score, the Poky F score, qual­i­ty rank, and stock rank.

[00:42:16] Cameron: And I know you’ve said you’ve looked for cor­re­la­tions before and you could­n’t real­ly find any. And Chat­G­PT, not sur­pris­ing­ly because you are a human AI, came up with a sim­i­lar sort of

[00:42:29] Cameron: algo­rithm It did, it looked at, it did two cor­re­la­tion analy­ses. One was the Pear­son cor­re­la­tion. And the oth­er was the Spear­man cor­re­la­tion.

[00:42:42] Cameron: Appar­ent­ly you have to have the word pair in the name of your cor­re­la­tion, uh, or else it’s not valid. So bot­tom line is, after it did all of this, it said, finan­cial health rat­ing shows a pos a mod­er­ate pos­i­tive cor­re­la­tion with the Alt­man Z2 score and qual­i­ty rank. This sug­gests that stocks rat­ed as strong by Stock Doc­tor tend to have high­er Alt­man Z2 scores and qual­i­ty ranks accord­ing to Stock­o­pe­dia.

[00:43:10] Cameron: Finan­cial health trend has a weak or neg­li­gi­ble cor­re­la­tion with most of the met­rics, indi­cat­ing that the trend in finan­cial health as mea­sured by Stock Doc­tor does not strong­ly cor­re­spond with the met­rics pro­vid­ed by Stock­o­pe­dia. Star stock sta­tus shows no cor­re­la­tion val­ues, like­ly due to the lack of vari­a­tion.

[00:43:29] Cameron: Most stocks that are looked at were labelled as non star stocks. These cor­re­la­tions sug­gest that there is some align­ment between Stock Doc­tor’s finan­cial health rat­ings and Stock­o­pe­di­a’s met­rics, espe­cial­ly for the finan­cial health rat­ing. How­ev­er, the cor­re­la­tions are not par­tic­u­lar­ly strong, indi­cat­ing that while there is some over­lap, the two com­pa­nies like­ly eval­u­ate stocks using dif­fer­ent method­olo­gies or weight dif­fer­ent fac­tors.

[00:43:54] Cameron: So then I asked it to give me some sug­ges­tions as to cut offs. I should use in Stock­o­pe­dia. Um, I said, I tend to look for stocks in Stock Doc­tor. I tend to look for stocks that have a finan­cial health rat­ing of strong or sat­is­fac­to­ry and a finan­cial health trend of recov­er­ing or steady. What cut­offs should I use in Stock­o­pe­dia with the Alt­man Z2 score and the qual­i­ty rank to map close­ly to the finan­cial health rat­ings that I pre­fer in Stock Doc­tor?

[00:44:25] Cameron: Said, um, blah, blah, blah. It gave me some scores, basi­cal­ly. Alt­man’s Zed score, um, said a mean of 4. 02, and the qual­i­ty rank a mean of 87. 57. But then it said, it sug­gest­ed cut­offs for the Zed score were 3. 6 or high­er, for the qual­i­ty rank 91 or high­er. Which I did! So I test­ed all of that. Um, Now, it was inter­est­ing because, as you may recall, when, uh, we were doing the U.

[00:45:05] Cameron: S. check­list, uh, re eval­u­a­tion a week or so ago, and I was, uh, we were, we decid­ed to actu­al­ly Fil­ter it based on the two scores that it said have no cor­re­la­tion what­so­ev­er. , um, the stock rank and the, um, what was the oth­er one? The, the, um, f score and I, I plugged them in very high and it came up with, uh, noth­ing.

[00:45:43] Cameron: So let me, um, just open up this buy list that I did yes­ter­day. So when I com­pare, when I com­pared my. Um, that’s the wrong sheet.

[00:46:14] Cameron: Hold on, I’ll cot­ton pick in a

[00:46:15] Cameron: minute. I’ve got to find

[00:46:16] Tony: when you did your Aus­tralian down­load, did you use those Chat­G­PT cut­offs of 91 for qual­i­ty and I think it was 4. 02

[00:46:26] Tony: for

[00:46:26] Tony: F score.

[00:46:28] Cameron: I did a vari­a­tion of that. Yeah,

[00:46:30] Cameron: just look­ing for my notes.

[00:46:34] Tony: And that had a good over­lap with the nor­mal

[00:46:36] Tony: QAV

[00:46:37] Tony: buy list.

[00:46:39] Cameron: Well, what I did was I just did, um, the buy list with­out fil­ter­ing, uh, the

[00:46:44] Cameron: Stock­o­pe­dia one with­out doing any of that fil­ter­ing, right? I got the, I got the, the basic list with none, none of those things being fil­tered and that had a very big over­lap.

[00:46:56] Tony: Okay.

[00:46:57] Cameron: as I said ear­li­er, there were some stocks that were on the Stock­o­pe­dia one that weren’t on Stock­o­pe­dia, sor­ry, Stock Doc­tor weren’t on Stock­o­pe­dia and vice ver­sa.

[00:47:06] Cameron: I did some analy­sis on the ones that were miss­ing on the Stock­o­pe­dia list and as I said, most of them, it was because they had zero trad­ing vol­ume.

[00:47:16] Cameron: So they real­ly should­n’t be on the stock doc­tor list any­way, because it’s kind of point­less. Um, so, so with­out fil­ter­ing on any of the finan­cial health met­rics or qual­i­ty met­rics,

[00:47:31] Cameron: it was basi­cal­ly,

[00:47:33] Cameron: uh, a car­bon copy of the stock doc­tor

[00:47:35] Cameron: list.

[00:47:36] Tony: Which was being fil­tered on finan­cial health and

[00:47:39] Cameron: Not fil­tered, but scored.

[00:47:42] Cameron: Yeah.

[00:47:43] Tony: Okay.

[00:47:43] Cameron: And I, and I am scor­ing

[00:47:46] Cameron: the Stock­o­pe­dia list on some of those things as well. Don’t ask me for specifics. I’d have to go back in and look at the cod­ing, but, um, yeah, basi­cal­ly end­ed up with the same list, um, with a cou­ple of minor excep­tions, but basi­cal­ly the same list. When I fil­tered the Stock­o­pe­dia list based on Chat­G­P­T’s record rec­om­men­da­tions for strong and steady and recov­er­ing and those sorts of things, I end­ed up with About six stocks that I could buy.

[00:48:24] Cameron: But of course in Stock Doc­tor, when we’re pro­duc­ing the list, we don’t fil­ter out those stocks, like we don’t fil­ter

[00:48:35] Cameron: out on

[00:48:36] Cameron: that, right? We

[00:48:37] Tony: We score on it. We down­load them and then

[00:48:39] Tony: score.

[00:48:41] Cameron: exact­ly.

[00:48:42] Tony: Right.

[00:48:44] Cameron: So that was my find­ing, um, basi­cal­ly

[00:48:48] Cameron: that the Stock­o­pe­dia check­list for Aus­tralia as it stands. basi­cal­ly repli­cates the Stock

[00:48:58] Cameron: Doc­tor check­list.

[00:49:01] Tony: How­ev­er, when we run it for the US, we get stocks which look like they’re near

[00:49:05] Tony: bank­rupt.

[00:49:06] Cameron: Yes.

[00:49:09] Tony: Did you ask Chat­G­PT

[00:49:10] Tony: why

[00:49:11] Tony: that was the case?

[00:49:13] Cameron: have not gone to that step yet, but that was my work yes­ter­day where it got me and I was like, And which,

[00:49:19] Cameron: which is, you know, what I found the first time when I start­ed build­ing Stock­o­pe­dia check­list. I got it to repli­cate the Aus­tralian list, and then I applied it to the US, and then we found this.

[00:49:29] Cameron: So, any­who, that’s my update, is that it, um, as it cur­rent­ly sits, it repli­cates Stock Doc­tor. Um, uh, with some improve­ments,

[00:49:41] Cameron: real­ly, because it’s fil­ter­ing

[00:49:43] Cameron: out the very, very low

[00:49:44] Tony: Yeah, zero

[00:49:46] Cameron: ADT

[00:49:47] Cameron: stocks. Yeah.

[00:49:48] Tony: Right. Um, but I still have the ques­tion, Mabb, when we run it for the US stocks,

[00:49:53] Tony: we get a lot of stocks on there

[00:49:54] Tony: which, on their Q scores and their F scores, sug­gest they’re in finan­cial prob­lems. Right.

[00:50:00] Cameron: Yeah. And, well let’s think this through, um, why would it give us the same list of stocks in Aus­tralia, which we assume are high qual­i­ty, but then give us a list of shit­ty stocks in the US?

[00:50:26] Tony: Prob­a­bly Joe Biden.

[00:50:29] Cameron: I was going to go with Ray­gun, but okay, Joe Biden, Yeah. All right. I don’t know. That’s my prob­lem for this week.

[00:50:37] Cameron: I’ll try and work that out. But any­way, there you go. Inter­est­ing about the cor­re­la­tion stuff too. I thought just that it’s not, um, obvi­ous, uh, how those finan­cial health met­rics relate to each oth­er

[00:50:51] Cameron: real­ly.

[00:50:53] Tony: Yeah. Right. Yeah. And that’s what I found too, because, uh, the Stock Doc­tor finan­cial health sys­tem was based on par­tic­u­lar research about all the ratios that were found in com­pa­nies that went bank, well, became bank­rupt and then reversed

[00:51:09] Tony: them. Where­as the Q scores and the F scores, I guess it’s some­thing sim­i­lar, but did­n’t exact­ly adopt that method­ol­o­gy.

[00:51:18] Cameron: Right.

[00:51:19] Cameron: Yeah. But they do have the bank­rupt­cy

[00:51:21] Cameron: risk

[00:51:21] Cameron: thing there, which,

[00:51:23] Tony: Yeah. There’s still.

[00:51:24] Cameron: hmm.

[00:51:25] Tony: They should still be telling us which, on a broad scale, which ones are finan­cial­ly healthy and which ones aren’t, in both cas­es.

[00:51:32] Tony: Yeah,

[00:51:34] Cameron: All right, Mr. Super Investor House­hold Name. That’s all I’ve got for today.

[00:51:39] Cameron: What have you got on your list of talk­ing points?

[00:51:42] Tony: just the fact that it’s com­pa­ny report­ing sea­son, so, um, uh, start­ed, uh, in earnest this week. A cou­ple of, um, head­lines I’ll go through, but, uh, just, um, a shout out to peo­ple if they’re doing

[00:51:57] Tony: down­loads to just pay a lit­tle bit of atten­tion to the col­umn which tells you how old the fig­ures are.

[00:52:03] Tony: Right. It’s. The QAV

[00:52:04] Tony: check­list is

[00:52:05] Tony: using.

[00:52:07] Cameron: Sor­ry, I’ve got a, I’ve got a point on that. So when I was com­par­ing my buy list to Alex’s buy list yes­ter­day, I think QBE. Was one that she had that I did­n’t have. And when I was com­par­ing all of the stats, I, it had been filled it out of mine ’cause its prop calf was like 11 and she had the pop prop calf at four.

[00:52:29] Cameron: And, you know, I spent a cou­ple of min­utes going, what, how? And then, you know, hav­ing been down this road before, imme­di­ate­ly went and looked at the. Results. And I think she must’ve looked at it Mon­day morn­ing. I did it Fri­day night and the results had hit Stock Doc­tor dur­ing

[00:52:46] Tony: Right.

[00:52:47] Cameron: dur­ing that time. And that was the

[00:52:48] Cameron: dif­fer­ence.

[00:52:49] Cameron: Yeah. So it is, it can make a big

[00:52:50] Cameron: dif­fer­ence.

[00:52:52] Tony: Very much so. And yeah, so just if you are think­ing of.

[00:52:57] Tony: Poten­tial­ly buy­ing some­thing or even sell­ing some­thing, just go back and make sure you’re work­ing off the lat­est fig­ures. If you think you are, they may not have reached Stock Doc­tor yet.

[00:53:05] Cameron: Yeah. Right.

[00:53:06] Tony: So just because, you know, QBE announced its results on Fri­day does­n’t mean it’s in Stock Doc­tor by Mon­day.

[00:53:12] Tony: So, yeah, just be care­ful of that. Um, yeah, so some, um, some inter­est­ing Com­men­tary, espe­cial­ly around retail stocks. So going back a week or two, there was an arti­cle in the Fin about Myer and when some­thing like this hefty dis­count­ing at Myer’s fash­ion brands and low­er spend­ing across its depart­ment stores are weigh­ing on prof­its.

[00:53:33] Tony: The Solomon Lew backed retail­er has warned with sales down almost 3 per­cent to 3. 27 bil­lion in the last finan­cial year. The warn­ing to investors ahead of the release of Myer’s finan­cial results next month comes in Broad­est slug­gish­ness amongst retail­ers. So that was, um, a week or two ago and Myer’s, Myer’s results come out a month lat­er than most the results we’ll talk about, but they were, they were kind of in their con­fes­sion sea­son.

[00:54:02] Tony: But then, um, today Uh, front page of the FIN, JB HiFi, Sales Fuel Retail Hopes. So, Stronger sales at JB HiFi have fuelled hopes of an end to a long peri­od of weak con­sumer demand, with investors pre­dict­ing a bet­ter than expect­ed earn­ings sea­son for list­ed retail­ers. Two weeks ago, they were fore­cast­ing doom and gloom.

[00:54:27] Tony: Now it’s bad. It’s bet­ter, it’s bet­ter than expect­ed. The elec­tron­ics and con­sumer goods giant is among the first to report full year earn­ings, with sales across its busi­ness­es, includ­ing the good guys, down 0. 4 per­cent to 9. 59 bil­lion in the year to June 30. Prof­its fell 16. 4 per­cent to 438. 8 mil­lion. But those results, and a 16 per­cent slide in earn­ings to 647.

[00:54:52] Tony: 2 mil­lion, were bet­ter than expect­ed by the mar­ket, which had gone cold on the sec­tor after com­pa­nies as depart­ment store own­er Myer warned of heavy dis­count­ing. JB Hi Fi stores in Aus­tralia deliv­ered a year on year increase in turnover of 5. 6%. That sent JB Hi Fi’s share price up more than 8%, the retail­er clos­ing 5.

[00:55:14] Tony: 61 high­er at 72. 98. Shares have climbed more than a third since Decem­ber 31.

[00:55:20] Cameron: you

[00:55:24] Tony: mixed results com­ing out of Nick Scali, which has been on the buy list ear­li­er on in the year. Nick Scali, Chief Exec­u­tive, Antho­ny Scali says Labor’s tax cuts last month have done lit­tle to spur spend­ing.

[00:55:35] Tony: The retail­er has record­ed the slide in sales. As shop­pers stay away from big tick­et pur­chas­es, the com­pa­ny cut its div­i­dend in line with an 18.8% fall in prof­it for the 12 months to June 30 to 82.1 mil­lion. It will pay a ful­ly franked 33%, a 33 cents per share in Octo­ber, tak­ing the full year pay­ment to investors to 68 cents.

[00:55:59] Tony: So kind of a mixed bag in the retail. Sec­tor, um, and it’s been dri­ving that par­tic­u­lar sec­tor up and down as the num­bers come out, um, and I think it gets back to this whole dis­cus­sion around who can fore­cast what’s going to hap­pen because two weeks ago, every­one was bas­ing and anchor­ing their fore­casts on what hap­pened to Myer, and now they’re anchor­ing their fore­cast on what’s hap­pen­ing to JB, And yet Nick Scali comes out with a down­turn which is big enough to cut its div­i­dend, which is some­thing that com­pa­nies are loathe to do.

[00:56:32] Tony: So it’s a bit all over the shop, but it is dri­ving stock prices at the moment. Um, and anoth­er top­sy turvy one was QBE, which came out at the end of last week. QBE pun­ished as pre­mi­um price ris­es peak. QBE is slow­ing the pace of insur­ance pre­mi­um increas­es on con­sumers as height­ened com­pe­ti­tion and tighter house­hold bud­gets con­strain its abil­i­ty to raise prices and wider prof­it mar­gins, while after tax prof­its at the insur­ance giant dou­bled to 801 mil­lion U.

[00:57:06] Tony: S., In the six months to June 30, investors pun­ished the com­pa­ny after it missed expec­ta­tions and said price increas­es would slow. UBE shares fell more than 4 per­cent at the start of trade yes­ter­day before recov­er­ing to close 1. 7 per­cent or 0. 28 low­er at 16. 05, a high­er 0. 24 per share inter­im div­i­dend of which 0.

[00:57:30] Tony: 48 is franked, did not con­sole investors. Last August, the com­pa­ny only returned 0. 14 per share to share­hold­ers. UBS ana­lyst Scott Rus­sell said there was a clear slow­down in QBE’s pric­ing pow­er. It increased pre­mi­ums by 9. 9 per­cent in Aus­tralia over the half, com­pared with the 13. 3 per­cent increase it imple­ment­ed in the six months to Decem­ber 31.

[00:57:56] Tony: So again, com­pa­ny dou­bles its prof­it. Um, can raise prices dur­ing a cost of liv­ing cri­sis, but only by 9.9% so it gets pun­ished. So it’s, uh, , it’s kin­da like good stocks are being pun­ished by bad fore­cast­ers is, um, is real­ly I think the take­out for this report­ing sea­son. And as you say, QB is back on the buy list.

[00:58:18] Tony: I do own it. I’ve owned it for a while. It’s been a good stock to own. Um, so have a look at it. I guess if you, you wan­na have a look at a stock that you, um, has been pun­ished but is, is still. You know, throw­ing off lots of cash and we can buy to the cheap price to oper­at­ing cash flow. And then the last one, um, so I’m going to just talk quick­ly about super retail.

[00:58:42] Tony: Anoth­er stock I own, and I’ve owned for a while, and a stock that went up when JB HiFi released their results, because Super retails in that dis­cre­tionary retail sec­tor as well. It owns Rebel Sports amongst oth­er brands, but it’s, uh, it’s been tak­en to court by an ex employ­ee and, uh, The ex employ­ee alleges, and this is what the fin reports, Super Retail Chief Exec­u­tive Antho­ny Heredie presided over a dys­func­tion­al work­place, improp­er­ly spent com­pa­ny mon­ey on trav­el, and even spat on senior employ­ees as he yelled at them accord­ing to explo­sive claims con­tained in court fil­ings.

[00:59:20] Tony: Mr. Heredie and the com­pa­ny which oper­ates the Rebel Sport, Super Cheap Auto, BCF and Mack Pack retail chains are Being sued in the fed­er­al court by for­mer legal chief Rebec­ca Far­rell, who wants Super Retail to hon­our a sev­er­ance deal. She says they reached Ms. Far­rell, also alleged she was bul­lied and harassed at work.

[00:59:38] Tony: So, there’s that, when that par­tic­u­lar issue was announced, the Super Retail share price went down a lot. And there was spec­u­la­tion that, um, if they, if Super Retail could not defend this case, they’d be up for tens of mil­lions of dol­lars. My read­ing of it, and this is just a layper­son­’s read­ing of it, is Unfair dis­missal cas­es gen­er­al­ly don’t get paid out tens to tens of mil­lions of dol­lars, it’s nor­mal­ly, you know, a year’s salary or some­thing like that.

[01:00:10] Tony: In fact, I had been told once by a bar­ris­ter that judges are loathe to pay out peo­ple more than what they get paid. So, yeah, you’re talk­ing about sort of 500, 000 there as a kind of cap on these sorts of things. There might be some­thing else going on that comes out dur­ing the court case, which I’m not aware of, but it’s a dis­trac­tion, in my opin­ion, and, um,

[01:00:34] Tony: I’m gonna watch the results when they come out and go by what the num­bers say, not what the news­pa­pers say, because they’re just report­ing

[01:00:40] Tony: sala­cious head­lines in that kind of sto­ry, from

[01:00:42] Tony: what I

[01:00:43] Tony: can see.

[01:00:43] Tony: But was

[01:00:44] Cameron: Let’s talk about fore­cast­ing reminds me of the, um, quote that I put in the newslet­ter that went out today from Dean Williams. Don’t fore­cast. Buy what is cheap today. Let oth­er peo­ple deal with the odds against pre­dict­ing the future. And I actu­al­ly looked that up. It’s from a speech. He was, uh, an investor in the U.

[01:01:09] Cameron: S. And it’s from a speech that he gave

[01:01:12] Cameron: in 1985.

[01:01:15] Cameron: I think he was with a,

[01:01:16] Tony: a house­hold name?

[01:01:18] Cameron: uh, no, he was­n’t a house­hold name, Tony. So we don’t have to,

[01:01:21] Cameron: in fact, you could prob­a­bly just take the quote and say that

[01:01:23] Cameron: you said it and it’ll,

[01:01:25] Tony: right.

[01:01:25] Cameron: uh,

[01:01:27] Cameron: be just as good. So from a speech that he gave, he was with a firm called Bat­tery March.

[01:01:31] Cameron: And, um, I’m, I’m going to read a lit­tle bit from the, the speech I’ve

[01:01:35] Cameron: got in front of me says, the sec­ond idea I’m going to ask you to think about is that most of us spend a lot of our time doing some­thing that human beings just don’t do very well. Pre­dict­ing things. What earn­ings will be in a few years, when inter­est rates will peak, what infla­tion will be.

[01:01:52] Cameron: One of the most con­sum­ing uses of our time in fact has been accu­mu­lat­ing infor­ma­tion to help us make fore­casts of all those things we think we have to pre­dict. Where’s the evi­dence that it works? I’ve been look­ing for it, real­ly. Here are my con­clu­sions. Con­fi­dence in a fore­cast ris­es with the amount of infor­ma­tion that goes into it, but the accu­ra­cy of the fore­cast stays the same.

[01:02:17] Cameron: And when it comes to fore­cast­ing as opposed to doing some­thing, a lot of exper­tise is no bet­ter than a lit­tle exper­tise and may even be worse. The con­so­la­tion prize is pret­ty con­sol­ing, actu­al­ly. It’s that you can be a suc­cess­ful investor with­out being a per­pet­u­al fore­cast­er. Not only that, I can tell you from per­son­al expe­ri­ence, The one of the most lib­er­at­ing expe­ri­ences you can have is to be asked to go over your fir­m’s eco­nom­ic out­look and to say, we don’t have one.

[01:02:48] Cameron: In the advanced mate­r­i­al you were sent, I noticed some words that smiled at me like the Mona Lisa. It is gen­er­al­ly rec­og­nized that growth stocks pro­duce a supe­ri­or risk adjust­ed rate of return. How­ev­er, this is only true for stocks that are expect­ed to grow in the future. And cor­re­la­tions between past growth and future growth are low, as Goma Pyle would say, how true, how true.

[01:03:09] Cameron: I’ve con­clud­ed this about growth stocks. There’s no such thing as a growth stock, only pass­ing phas­es of growth in almost every com­pa­ny’s life. Phas­es whose begin­ning and end usu­al­ly appear in dis­guise. If there is a reli­able and help­ful prin­ci­ple at work in our mar­kets, my choice would be the one that sta­tis­ti­cians call regres­sion to the mean.

[01:03:31] Cameron: Where have I heard that before? The ten­den­cy toward aver­age prof­itabil­i­ty is a fun­da­men­tal, if not THE fun­da­men­tal, prin­ci­ple of com­pet­i­tive mar­kets. It’s an inevitable force push­ing those prof­its and their val­u­a­tions back to the aver­age. It can be a pow­er­ful invest­ment tool. It can, almost by itself, select cheap port­fo­lios and avoid expen­sive ones.

[01:03:55] Cameron: It’s Plain Eng­lish equiv­a­lent is that some­thing usu­al­ly hap­pens to keep both good news and bad news from going on for­ev­er. Any­way, the rest of the speech is just as good, but um,

[01:04:09] Cameron: yeah, I just, I was think­ing of that while you were talk­ing about pre­dic­tions today, it was fresh in

[01:04:16] Cameron: my head.

[01:04:17] Tony: Yeah, very good.

[01:04:19] Cameron: Regres­sion

[01:04:20] Tony: right. I have, yes, Regres­sion to the mean.

[01:04:23] Tony: That’s, yes, that’s sta­tis­tics is behind every­thing real­ly, isn’t it?

[01:04:29] Cameron: Yeah.

[01:04:30] Tony: Yeah. And eco­nom­ics in terms of, yeah, com­pe­ti­tion brings mar­gins down over time. I like that one. I like that part of that quote there, where he talks about, uh, Uh, high growth in the pri­or years may not pre­dict high growth in the future years.

[01:04:48] Tony: And, and that’s always the prob­lem with growth stocks is when they stop grow­ing, the share price plum­mets.

[01:04:54] Tony: Yeah. It’s, it’s a

[01:04:57] Tony: growth stocks are real­ly about tim­ing the mar­ket. I think as much as they’re attrac­tive and you can make a lot of mon­ey on the way up, you’ve got to get out at the right time.

[01:05:06] Cameron: Hmm.

[01:05:08] Tony: Any­way, I have one last arti­cle to dis­cuss with you, um, it’s, it’s enti­tled again from the Fin Review, Inside Chi­na’s Vicious Defla­tion­ary Cycle. Uh, Con­sump­tion despair at Chi­na’s fal­ter­ing econ­o­my has rip­pled through major cities and out into its regions. On the out­skirts of Shang­hai and Yang­pu Dis­trict, Med­ical Assis­tant Ming says she’s deferred get­ting her nails done at the local salon because prices are drop­ping sharply month on month.

[01:05:36] Tony: Maybe prices will go to zero and I can have my fin­ger­nails coloured for free, she jokes on the phone to AFR Week­end, speak­ing via a trans­la­tor. Chi­nese econ­o­my is under immense pres­sure from a col­lapse in con­sumer spend­ing, an epic prop­er­ty bust and hid­den local gov­ern­ment debt. For­eign investors are flee­ing and the gov­ern­ment

[01:05:57] Tony: has been pump­ing mon­ey into fac­to­ries to off­set weak­ness else­where,

[01:06:01] Tony: fuelling a surge of exports and esca­lat­ing

[01:06:03] Tony: trade

[01:06:04] Tony: ten­sions.

[01:06:07] Cameron: Well, hold on a sec­ond. Why is the AFR quot­ing

[01:06:10] Cameron: med­ical assis­tant Ming about her

[01:06:12] Cameron: fin­ger­nails?

[01:06:13] Tony: Colour, Colour,

[01:06:15] Tony: Colour, Ger­ry.

[01:06:17] Cameron: expert on Chi­na’s eco­nom­i­cal

[01:06:20] Tony: No, she’s an she’s an expert on fin­ger­nails.

[01:06:26] Cameron: What? Oh, I don’t get the rel­e­van­cy

[01:06:30] Cameron: of, uh, this just like she’s woman

[01:06:32] Cameron: on

[01:06:32] Cameron: the street.

[01:06:33] Tony: Yeah, yeah, we’re try­ing to put some, try­ing to put a face to the stats, I guess. Tell a sto­ry

[01:06:39] Tony: for the stats.

[01:06:40] Cameron: They have a, they have a ringer in, uh, Shang­hai and they’re

[01:06:44] Cameron: like, quick, get me a, get me an aver­age woman on the street.

[01:06:48] Cameron: I

[01:06:48] Cameron: need to, I

[01:06:49] Cameron: need a quote.

[01:06:51] Tony: Yeah, yeah, yeah. Um, but I guess the, the only rea­son for rais­ing this is that, uh, I did notice the iron ore price. I think it’s a Josephine or a sell at the moment on our com­modi­ties.

[01:07:04] Tony: Um, and it’s.

[01:07:06] Cameron: of those.

[01:07:07] Tony: Yeah, and it’s just going below 100 a ton, which has­n’t been below for a long time. So cer­tain­ly, um, the iron ore min­ers are

[01:07:17] Tony: quite linked to the Chi­nese eco­nom­ic cycle.

[01:07:24] Cameron: So you’re fore­cast­ing,

[01:07:26] Cameron: uh, Chi­na’s

[01:07:28] Tony: that,

[01:07:29] Cameron: in the

[01:07:30] Tony: I’m fore­cast­ing that Ming will have her nails done at some stage.

[01:07:39] Cameron: Yeah,

[01:07:40] Tony: And that’s all I’ve got. That’s it for me.

[01:07:41] Cameron: that’s, that’s our Chi­na doom and gloom arti­cle for

[01:07:45] Cameron: the week.

[01:07:47] Tony: Yeah, you get them a lot, don’t we? We, sort of been see­ing

[01:07:50] Tony: him for the last four or five

[01:07:51] Tony: years. Yeah.

[01:07:53] Cameron: And as we point out, you know, their growth rates are still high­er than every growth rate in the West­ern world, but

[01:08:00] Tony: Cor­rect.

[01:08:01] Cameron: where they were

[01:08:03] Cameron: 10 years ago. 15 per­cent or 10%, they’re down at 7 per­cent or

[01:08:08] Cameron: what­ev­er it is.

[01:08:09] Tony: And they don’t have to wor­ry about the Reserve

[01:08:11] Tony: Bank chang­ing inter­est rates, they just go, let’s change them.

[01:08:16] Cameron: And again, you know, it was a growth, it was a growth stock for 40 years and now it’s matur­ing and becom­ing an advanced

[01:08:26] Cameron: econ­o­my

[01:08:27] Tony: Mm hmm.

[01:08:28] Cameron: in many ways. Uh, but you know, the, the, the, um, per­spec­tive you get in the West­ern media isn’t

[01:08:37] Cameron: Chi­na’s now become an advanced econ­o­my. We should­n’t expect it to grow at 10 to 15%.

[01:08:42] Cameron: Yeah, it’s.

[01:08:43] Cameron: Chi­na’s econ­o­my is in freefall and

[01:08:45] Cameron: chaos.

[01:08:47] Tony: Well, it’s actu­al­ly a real­ly good

[01:08:48] Tony: par­al­lel because that’s exact­ly what hap­pens to growth stocks. They shoot up and then they mature

[01:08:53] Tony: and their growth slows down

[01:08:55] Tony: and they get re

[01:08:55] Tony: rat­ed or de rat­ed.

[01:08:58] Cameron: And, you know, I’ve, I’ve, um, read arti­cles and, and watched, um, news sto­ries from non West­ern sources, um, over the last six months about how Xi Jin­ping is, you know, tak­ing their econ­o­my through an inter­nal­iza­tion phase. They

[01:09:19] Cameron: kind of see the writ­ing on the wall, their trade rela­tion­ships. With the U. S. and the U.

[01:09:24] Cameron: S. ‘s allies. And they’re like, okay, we need to stand

[01:09:27] Cameron: on our own two feet now. And we need to make every­thing local­ly, build every­thing local­ly. And, uh, that’s, that is going to have an impact when they’re

[01:09:35] Cameron: retool­ing their econ­o­my at

[01:09:38] Cameron: that lev­el. Um,

[01:09:39] Tony: So they’ve put an edict out. They

[01:09:41] Tony: have to put an, on all those red caps with CCP on them, they have to put an M in front of it. Make Chi­na

[01:09:47] Tony: great

[01:09:47] Tony: again.

[01:09:49] Cameron: I thought you were talk­ing about the red MAGA caps that are made in Chi­na.

[01:09:57] Cameron: Are

[01:09:58] Tony: But what I will fore­cast, Cam, what I will fore­cast is that there’ll be

[01:10:03] Tony: excus­es made for poor per­for­mance amongst

[01:10:06] Tony: ASX list­ed stocks because of the Chi­nese econ­o­my

[01:10:09] Tony: at some stage.

[01:10:12] Cameron: Yes. Um, you just remind­ed me of a Sparks song. Uh, I know I haven’t con­vert­ed you into the Sparks yet, but they’ve got a song from their 1982 album, Angst In My Pants. It’s called I Pre­dict. And it’s great. This is, this is one of the rea­sons why I love Sparks. This is the lyrics. You’re gonna take a walk in the rain, and you’re gonna get wet, I pre­dict.

[01:10:41] Cameron: You’re gonna eat a bowl of chow mein and be hun­gry real soon, I pre­dict. Are my sources cor­rect? Are my sources cor­rect? Uh, my source is cor­rect. I pre­dict they’re gonna find the queen is a man, but that Philip don’t care. I pre­dict Lassie will prove that Elvis and her had a fleet­ing affair. I pre­dict, and it goes on like that.

[01:11:08] Cameron: Um, and some­body’s going to die, but I can’t reveal who. Cold beer will cure a cold. Cold beer and pret­zels takes care of can­cer. Moscow will march to France and they’ll do the can dance. Don’t wor­ry, it’ll work out. Max­im’s will throw them out. Any­way, I always think about that when we’re talk­ing about pre­dict­ing too.

[01:11:26] Cameron: You’re going to take a walk in the rain and you’re going to get wet, I pre­dict.

[01:11:31] Tony: Yeah,

[01:11:32] Cameron: I

[01:11:32] Cameron: don’t know why that’s rel­e­vant. You doing a pull pork today? Or are we going to

[01:11:35] Cameron: skip it see­ing as we’re like,

[01:11:37] Tony: it, we had the

[01:11:37] Tony: inter­view, yeah.

[01:11:38] Cameron: Yeah, good. After hours then, TK!

[01:11:42] Cameron: What have you

[01:11:43] Tony: yeah, yeah, or just, yeah, just horse races. Well, Dora­do ran third. last Fri­day, so that’s two thirds in a row. Missed the start but rat­tled home well, so he’ll do well in the future. Uh, Karst

[01:11:59] Tony: has, has,

[01:12:00] Tony: a, sor­ry,

[01:12:01] Cameron: Not dog food?

[01:12:02] Cameron: then?

[01:12:03] Cameron: Run­ning food? Okay.

[01:12:05] Tony: Karst runs this Sat­ur­day, hav­ing her first start, so get­ting excit­ed about that. Um, I am head­ing down to Cape Schanck for a cou­ple of weeks for a bit of a break.

[01:12:15] Tony: Um, and hope­ful­ly we’ll see Karst run, but I’ll miss her run on Sat­ur­day. Because it’s

[01:12:20] Tony: Jen­ny’s birth­day

[01:12:22] Cameron: Oh, well, what are you doing? Can

[01:12:24] Cameron: you reveal the plans?

[01:12:27] Cameron: Spe­cial?

[01:12:28] Tony: Yeah, we got din­ner, uh, din­ner with friends on Fri­day night to cel­e­brate. Her broth­er’s fly­ing down from Tul­ly to stay with us for a cou­ple of days. And then, uh, they’re fly­ing down on Sun­day to Mel­bourne. I’m going to dri­ve down over the week­end so we have a car at Cape Schanck. And then we do her fam­i­ly

[01:12:47] Tony: Sun­day and Mon­day nights for cel­e­bra­tions as

[01:12:49] Tony: well.

[01:12:51] Cameron: Love­ly! Well, wish Genie a hap­py birth­day from

[01:12:53] Cameron: us.

[01:12:55] Tony: thank you.

[01:12:57] Cameron: Uh, well.

[01:12:59] Cameron: that’s it.

[01:13:00] Cameron: Um, I watched a great film. You ever seen Repul­sion?

[01:13:07] Tony: Uh, I’ll say no. I may have many, many years ago.

[01:13:13] Tony: I cer­tain­ly know the title.

[01:13:15] Cameron: 1965, Roman Polan­ski’s first Eng­lish lan­guage film, star­ring Cather­ine Deneuve. And I swear to God, it must’ve been a huge influ­ence on David Lynch. It’s very Lynch y. Um, basi­cal­ly Cather­ine Deneuve is, uh, liv­ing in Lon­don with her sis­ter, both French, and she’s kind of, she’s got some thing going on, some psy­cho­log­i­cal dis­or­der, you don’t real­ly know what.

[01:13:47] Cameron: Unlike most Cather­ine Deneuve films I’ve seen, where she’s nor­mal­ly, from the 60s in par­tic­u­lar, where she’s a sex kit­ten, in this, she’s not. She’s repulsed by men, men are hit­ting on her all the time, and she’s like, giv­ing him the cold shoul­der. Some­thing going on with her. And then her sis­ter goes away, goes to Italy with a boyfriend for a cou­ple of weeks.

[01:14:08] Cameron: And Cather­ine is left by her­self and she’s basi­cal­ly just starts hav­ing hal­lu­ci­na­tions and night­mares and, you know, hal­lu­ci­na­tions. You think that she’s get­ting raped and that the big cracks are appear­ing in walls. And it’s all this sort of, you know, kind of Lynchy thing where just weird, dark, Unex­plain­able stuff’s going on and she’s freak­ing the hell out and it’s very dis­joint­ed.

[01:14:36] Cameron: Um, yeah, nice­ly done. Um, real­ly great per­for­mance from her, uh, fas­ci­nat­ing film, you know, ter­rif­ic Polan­s­ki film.

[01:14:45] Cameron: Big Polan­s­ki fan. I re watched Chi­na­town with Chris­sy a few weeks ago. I had­n’t seen it for a few years and, um, just great. Just, I mean, I had to explain what was going on to Chris­sy at sev­er­al points, but you know, it’s, it’s, it’s just a great film.

[01:15:01] Cameron: I just, yeah,

[01:15:02] Cameron: love It Seen

[01:15:04] Tony: It

[01:15:04] Tony: is. I agree. Yep.

[01:15:07] Tony: John Hus­ton was amaz­ing in it. um,

[01:15:12] Tony: and, and the whole, the whole twist at the end. And,

[01:15:15] Cameron: yes,

[01:15:16] Tony: yes, that was unex­pect­ed and unex­pect­ed to be dealt with in a

[01:15:20] Tony: Hol­ly­wood movie too, I thought.

[01:15:22] Cameron: Oh yeah, I, yeah. I thought.

[01:15:24] Cameron: you meant where she actu­al­ly gets

[01:15:25] Cameron: shot at the end, but yeah,

[01:15:26] Tony: No, no, no,

[01:15:27] Tony: the daugh­ter

[01:15:29] Cameron: the daugh­ter and John Hous­ton and that. Yeah. And the, and the great line and the final great line. Just. For­get it, Jake. It’s Chi­na­town.

[01:15:37] Tony: Chi­na­town,

[01:15:37] Tony: yeah.

[01:15:39] Cameron: Just great. Just great. Great line. Um, speak­ing of great lines, I start­ed to watch Bat­man Begins.

[01:15:48] Cameron: Had­n’t seen, haven’t seen that. And

[01:15:50] Cameron: God, I don’t know, since the boys were lit­tle, prob­a­bly

[01:15:53] Cameron: the

[01:15:53] Tony: Now, which one’s that? Is that the

[01:15:54] Tony: Chris­t­ian

[01:15:55] Tony: Slater? Not Chris­t­ian Slater? Chris­t­ian

[01:15:57] Cameron: Chris­t­ian Slater, would be a good Bat­man, but Chris­t­ian Bale. yeah. The first one of those. And, and like, the open­ing

[01:16:04] Cameron: scene, uh, he’s in like a Mon­go­lian

[01:16:06] Cameron: prison for unknown rea­sons, uh, before he meets, uh, Ra’s al Ghul.

[01:16:12] Cameron: And, um, And some big, meaty, burly, Mon­go­lian look­ing guy in the food line starts harass­ing him and says, he’s going to beat him up and says, I’m the dev­il. And then Bruce Wayne says, you’re not the dev­il, you’re prac­tice. And then just starts tak­ing on all of these Mon­go­lian pris­on­ers and the guards even­tu­al­ly haul him away.

[01:16:37] Cameron: And he goes, what are you doing that for? And they go, pro­tec­tion. I don’t need pro­tec­tion. We’re not pro­tect­ing you. We’re pro­tect­ing them.

[01:16:46] Cameron: I liked it.

[01:16:47] Tony: Yeah.

[01:16:48] Cameron: uh, yeah, I’ve seen that. That’s it. Still read­ing that, um, best book, The Stars, My Des­ti­na­tion, that I talked about last week. Real­ly enjoy­ing that.

[01:16:58] Cameron: And I’ve lost sev­en kilos in the last 30 days.

[01:17:01] Cameron: Tony, I’ve been wait­ing for you to, I’ve been wait­ing for you to go, Hey, you’re look­ing skin­ny, but it obvi­ous­ly was­n’t com­ing. So I thought I’d throw it

[01:17:06] Cameron: out there. Um, yeah,

[01:17:10] Tony: What’s the

[01:17:10] Tony: secret?

[01:17:12] Cameron: well, I don’t know if you know this, but I think we have talked about it. Like I’ve been track­ing my calo­ries and my exer­cise and every­thing using Chat­G­PT to do it, uh,

[01:17:20] Cameron: and a, and a Google sheet for the last year, more or less. Um, And was­n’t los­ing weight despite the insane amount of exer­cise that I do every week.

[01:17:31] Cameron: So I just, a month ago, I said to GPT, all right, what’s going on? What should I do? And I gave it all my calo­ries or my inputs, my out­puts. And it said, yeah, just, uh, drop your in. Take down by a cou­ple of hun­dred a day, which I did. And yeah, the weight’s been drop­ping off just main­tain­ing that. So it was just a small tweak, not a lot, but you know, I want­ed to lose a kilo a week and I’ve been los­ing a bit more, but you tend to lose a bit more in the, in the ear­ly stages, a lot of water weight.

[01:18:01] Cameron: You know, I nor­mal­ly find the first three kilos is pret­ty easy and then it starts to slow down, but, um, yeah, just, just a slight tweak with my calo­rie inputs. And basi­cal­ly, you know what? It was real­ly dessert. Chris­sy and I were hav­ing a bowl of yogurt with, uh, some frozen berries and a lit­tle bit of hon­ey every night.

[01:18:18] Cameron: We got into the habit, just dessert, you know, late at night, just cut that out. And, uh, now if I’m feel­ing sort of. You know, like Swede or Peck­ish, I’ll have a, um, uh, a Roobios or just some­thing to drink that’s a lit­tle bit sort of, you know, Roobios tea. It’s like no caf­feine, no caf­feine tea made from red bush, an African thing.

[01:18:45] Tony: done.

[01:18:46] Cameron: day I’ve been drink­ing more green tea. It’s in my thing, back to the green tea. It’s a bit of an appetite sup­pres­sant, uh, helps me eat less too dur­ing the day too. But yeah, and I tend not to eat until. Mid­day, ear­ly after­noon before I eat any­thing, a lit­tle bit of extend that inter­mit­tent fast­ing win­dow.

[01:19:06] Cameron: Although I do have a cof­fee first thing in the morn­ing, but that’s it. Um, but yeah, so I’ve been hap­py about that. Sort of fig­ured out the weight loss thing again, because I’ve been sort of sta­ble, you know, I was sort of sta­bi­lized for a cou­ple of years, you know, and with the amount of exer­cise that I do, I thought it would kick in even­tu­al­ly, but it has­n’t.

[01:19:23] Cameron: So I had to tweak, tweak the algo­rithm.

[01:19:29] Tony: Well

[01:19:29] Tony: done.

[01:19:31] Tony: Yeah,

[01:19:32] Cameron: Of course, I told my boys and they were like, Oh, that’s not good. You know, that’s, that’s not healthy. Yeah, it must be the stress. I’m like, it’s not stress.

[01:19:39] Cameron: It’s just, I’ve changed. Nah, it’s, yeah, for years, you know, you, you, you, you don’t have it cause you’ve got a nice child, but my boys.

[01:19:50] Cameron: Pre Kung Fu, for years, they were like, You need to exer­cise more! You need to get out and exer­cise more! So I start doing Kung Fu, then they’re like, You’re exer­cis­ing too much! It’s crazy! You got­ta, you got­ta cut it back! You’re doing too much! Then they’re like, You should be los­ing weight! So, you know, I start los­ing weight.

[01:20:03] Cameron: No, you should­n’t be los­ing that much weight! That’s not good! You know, you’re los­ing too much weight. Ah,

[01:20:11] Tony: Well, it’s nice to have opin­ion­at­ed

[01:20:12] Tony: boys.

[01:20:14] Cameron: yeah, yeah, yeah. And, and, and also to know I can nev­er do any­thing, right. Any­thing that I ever do, they’re, ah, that’s,

[01:20:22] Cameron: yeah. it’s ridicu­lous. That’s stu­pid. Yes, you’re doing it wrong.

[01:20:25] Cameron: I’m like, yeah, apple don’t fall

[01:20:28] Cameron: far from the tree.

[01:20:29] Tony: I was gonna say that. I noticed how I kept qui­et.

[01:20:34] Tony: And the only rea­son I raised it is because I’ll have a con­ver­sa­tion with you

[01:20:37] Tony: and then I’ll have a con­ver­sa­tion with your boys, and it’ll be,

[01:20:40] Tony: Uh,

[01:20:40] Tony: In both cas­es, it’ll be, uh, he said this and that’s so wrong.

[01:20:44] Cameron: Yeah, yeah, yeah. yeah, yeah.

[01:20:47] Tony: It’s fun.

[01:20:48] Cameron: I feel, I feel sor­ry for their moth­er.

[01:20:50] Cameron: Uh, so did my moth­er and I. Um, she’s like, oh my God, this, she went out, they took her out

[01:20:57] Cameron: for her birth, she was down in,

[01:20:59] Cameron: uh, recent­ly, it was her birth­day, and they took her out with their mom. And, uh, she, she, Jan came home after, she’s like, oh my God, those two are just, yeah, yeah.

[01:21:09] Cameron: younger ver­sions of you. She said they just talked, talked shit all night. And she said, Belin­da turned to her at one stage and she said, it’s their moth­er, my ex wife, and said, I feel

[01:21:22] Cameron: like they’re just Cameron at 23 all over again. You know,

[01:21:27] Tony: real­ly?

[01:21:28] Cameron: yeah, well, she’s known me since I was 14. So yeah, she has a good per­spec­tive.

[01:21:32] Cameron: Yeah.

[01:21:34] Cameron: Any­who, oh, and, but,

[01:21:37] Cameron: um, Hunter and I

[01:21:39] Cameron: are doing a pho­to­shoot for Tom­my Hil­figer in a

[01:21:41] Cameron: cou­ple of weeks. They’re for Father’s

[01:21:43] Tony: you’re los­ing weight, is it?

[01:21:45] Cameron: no, but, that won’t help, he wants me to cut my hair too, but that’s not gonna hap­pen. No, they’re doing a, you know, he did the Tom­my Hil­figer thing at New York Fash­ion Week, and he’s going back

[01:21:53] Cameron: to New York in a cou­ple of weeks. to do Fash­ion Week, um, again for Tom­my Hil­figer, but they want to do a Father’s Day cam­paign and they have the idea of get­ting all their influ­encers togeth­er with their

[01:22:03] Cameron: fathers.

[01:22:04] Tony: Oh nice.

[01:22:05] Cameron: you know, you prob­a­bly won’t hear from me much any­more. I’m sure I’ll be swept up, um, by

[01:22:11] Cameron: a big mod­el­ling agent

[01:22:13] Cameron: some­where in

[01:22:14] Cameron: Paris,

[01:22:15] Tony: re remem­ber me

[01:22:15] Tony: on the way down. Cam

[01:22:17] Cameron: all the way down.

[01:22:19] Cameron: You think this

[01:22:21] Cameron: can go fur­ther down from where I am now,

[01:22:23] Cameron: real­ly, I

[01:22:24] Tony: No, no. I know

[01:22:25] Cameron: my rent, but yeah, there’s fur­ther down. I’m not liv­ing in a tent,

[01:22:29] Tony: out,

[01:22:30] Cameron: not liv­ing in a van down by the riv­er

[01:22:32] Cameron: yet, but,

[01:22:32] Tony: You don’t have to think

[01:22:33] Tony: about me when

[01:22:34] Tony: you’re in Paris, but on the way

[01:22:35] Cameron: oh, on the way back

[01:22:37] Tony: Yeah.

[01:22:40] Tony: So you’re going to get one of those uh, thick bushy beards that they have for the

[01:22:44] Tony: you know, the more

[01:22:45] Tony: mature

[01:22:46] Tony: adult male mod­els.

[01:22:48] Cameron: if I could grow one of those beards, I would have one of those already.

[01:22:53] Cameron: Uh, I can’t grow facial

[01:22:55] Cameron: hair, can you? You used to

[01:22:56] Tony: Oh, yeah. I’ve got a, I grow a, white

[01:22:58] Tony: beard. Um, which I love doing, but Jen hates it. So

[01:23:03] Tony: if I go to Cape Shang for like a month, I’ll grow a white beard.

[01:23:06] Tony: and then come home and shave it

[01:23:07] Tony: off.

[01:23:08] Tony: yeah,

[01:23:09] Cameron: yeah, well that’s why I grow my hair

[01:23:11] Cameron: long, because it’s the only kind of facial

[01:23:14] Cameron: hair expres­sion that I have, I

[01:23:16] Cameron: can’t, can’t grow any­thing

[01:23:17] Cameron: else.

[01:23:19] Tony: I had a hair­cut last week and I’m start­ing to go a bit

[01:23:21] Tony: grey.

[01:23:22] Tony: I’ve noticed for the first time.

[01:23:24] Cameron: Why are you only

[01:23:25] Tony: both­er me, but,

[01:23:26] Cameron: I thought you

[01:23:26] Cameron: dyed your hair like Paul McCart­ney, why are you start­ing to go grey at

[01:23:30] Cameron: 60, that’s not right,

[01:23:34] Tony: well, I just am.

[01:23:37] Tony: But if I grow a beard, it’s white, like, it’s grad­u­al­ly going fur­ther and fur­ther up my tem­ples.

[01:23:44] Tony: Any­way,

[01:23:45] Cameron: make you look dis­tin­guished, it’s a

[01:23:46] Cameron: good look.

[01:23:48] Tony: yeah, okay, I hope so.

[01:23:50] Tony: A dis­tin­guished house­hold name.

[01:23:52] Cameron: Yeah, super invest­ed, Tony. You can, I think you should

[01:23:55] Cameron: get a busi­ness card with that put on it now.

[01:23:59] Tony: Yeah, well, just, uh, can you crop out the, the quote?

[01:24:03] Tony: From the sub­stack.

[01:24:05] Cameron: The quote. Yeah. Yeah. Yeah. I thought you meant, can you crop out Buf­fett and Ben­jamin Gra­ham and Char­lie Munger? I don’t want to be

[01:24:10] Cameron: asso­ci­at­ed with those ama­teurs and just, have it as

[01:24:13] Cameron: me. You could prob­a­bly, you know, uh, get, you could prob­a­bly get, um, ver­i­fied now on Twit­ter and Insta­gram

[01:24:22] Cameron: because of that, you know, like ver­i­fied as a, as a, big­wig,

[01:24:26] Tony: any­body is any­body on X any­more? I read today Elon suing his

[01:24:30] Tony: adver­tis­ers in

[01:24:32] Tony: Texas.

[01:24:33] Cameron: Oh, real­ly?

[01:24:34] Tony: Yeah, they’re not adver­tis­ing

[01:24:36] Tony: enough.

[01:24:37] Cameron: Right. Yeah. Yeah.

[01:24:39] Tony: I’ve pre told him all the fuck off. He’s now suing them because

[01:24:42] Tony: they’re not adver­tis­ing with him.

[01:24:46] Cameron: he was at, um, the Cannes Lion Fes­ti­val

[01:24:50] Cameron: a month or so ago and they had him on and that was the first thing that the guy who was mod­er­at­ing it, the head of WPP, first ques­tion was, well, six months ago you told us we could all fuck off. So, um, how’s that work­ing out for you?

[01:25:02] Cameron: That sort of thing. I thought that was

[01:25:06] Cameron: great. All right. Thank you, TK. Have a, have a good trip down to Cape Schanck. I’ll talk

[01:25:11] Cameron: to you

[01:25:11] Tony: Yeah. Thank you. All